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(a)Reported as discontinued operations on our condensed consolidated balance sheets.
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美國
證券交易委員會
華盛頓特區20549
_______________________________________________
表格 10-Q
_______________________________________________
（標記一）
x根據1934年證券交易法第13或15(d)節的季度報告
截至季度結束日期的財務報告2024年9月30日
或者
o根據1934年證券交易法第13或15(d)節的轉型報告書
在從 到過渡期間
委託文件編號：001-39866001-39299
_______________________________________________
Alight公司
（依據其憲章指定的註冊名稱）
_______________________________________________
特拉華州86-1849232
（國家或其他管轄區的
公司成立或組織）
（IRS僱主
唯一識別號碼）
位於South Canal Street 320號
50層，5000套房, 芝加哥, 伊利諾伊州
60606
，（主要行政辦公地址）(郵政編碼)
(224) 737-7000
(註冊人電話號碼，包括區號)

（前名稱、地址及財政年度，如果自上次報告以來有更改）
______________________________________________
在法案第12(b)條的規定下注冊的證券：
每一類的名稱交易標誌在其上註冊的交易所的名稱
A類普通股，每股面值爲$0.0001ALIT
紐約證券交易所
請勾選以下選項以指示註冊人是否在過去12個月內(或在註冊人需要提交此類報告的較短時間內)已提交證券交易法1934年第13或15(d)條所要求提交的所有報告，並且在過去90天內已受到此類報告提交要求的影響。是 x 否 o
請在以下勾選方框表示註冊人是否已在Regulation S-T Rule 405規定的前12個月(或在註冊人需要提交此類文件的較短期間內)提交了每個互動數據文件。是 x 否 o
請勾選標記以說明註冊人是大型快速申報人、加速申報人、非加速申報人、較小的報告公司還是新興成長型公司。請查看《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速報告人
x加速文件提交人o
非加速文件提交人o較小的報告公司o
新興成長公司o
如果是新興成長型企業，請勾選複選標記，表明註冊者已選擇不使用延長過渡期來符合根據證券交易法第13(a)條規定提供的任何新財務會計準則。 o
請勾選以下選項以指示註冊人是否爲外殼公司(根據交易所法規則12b-2定義)。是o 否 x
截至2024年11月7日，報名者 532,506,339 shares of Class A Common Stock, par value $0.0001 per share, 4,978,807 shares of Class b-1 Common Stock, par value $0.0001 per share, 4,978,807 shares of Class b-2 Common Stock, par value $0.0001 per share, and 560,433 流通中的股份爲每股面值爲$0.0001的Class V普通股1,090,184股。


目錄
頁面
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前瞻性聲明
本10-Q表季度報告包含經修訂的1933年《證券法》第27A條和經修訂的1934年《證券交易法》（「交易法」）第21E條所指的前瞻性陳述。這些前瞻性陳述包括但不限於與未來財務業績預期以及業務戰略或業務預期相關的陳述。前瞻性陳述通常可以通過使用 「預測」、「出現」、「近似」、「相信」、「繼續」、「可以」、「估計」、「預期」、「預見」、「打算」、「可能」、「計劃」、「可能」、「潛在」、「預測」、「項目」、「尋求」、「應該」 或類似的詞語來識別表達式或其否定詞。這些前瞻性陳述基於截至本報告發布之日可用的信息以及公司管理層當前的預期、預測和假設，涉及許多判斷、已知和未知的風險和不確定性以及其他因素，其中許多因素是公司及其董事、高級管理人員和關聯公司無法控制的。因此，不應依賴前瞻性陳述來代表公司以後的任何日期的觀點。除非適用的證券法另有要求，否則公司沒有義務更新、添加或以其他方式更正此處包含的任何前瞻性陳述以反映其發表之日後的事件或情況，無論這些陳述是由於新信息、未來事件、在本文發佈之日之後出現的不準確之處還是其他原因造成的。
由於許多已知和未知的風險和不確定性的影響，我們的實際結果或表現可能與這些前瞻性聲明所表示或暗示的結果存在實質性差異。導致實際結果不同的一些因素包括:
•我們能夠實現處置我們的工資和專業服務業務所期望的收益;
•由於我們的客戶所服務的行業、市場和地區經濟活動下降，可能受到我們無法控制的宏觀經濟因素、利率期貨上升或貨幣和財政政策變化的影響；
•與競爭相關的風險;
•網絡攻擊、安防-半導體漏洞以及其他重大幹擾可能暴露公司在信息科技系統和網絡中的法律責任，損害其聲譽或對公司運營結果產生負面影響；
•我們對機密、個人或專有數據的處理;
•來自激進股東的行動或提案;
•適用法律或法規的變更；
•未能成功實施旨在爲我們的客戶創造價值或提高內部效率的運營和技術提升；
•與使用新興技術（如人工智能（「AI」）和機器學習）相關的問題；
•claims (particularly professional liability claims), litigation or other proceedings against us;
•the inability to adequately protect key intellectual property rights or proprietary technology;
•past and prospective acquisitions, including the failure to successfully integrate operations, personnel, systems, technologies and products of the acquired companies, adverse tax consequences of acquisitions, greater than expected liabilities of the acquired companies and charges to earnings from acquisitions;
•the success of our strategic partnerships with third parties;
•the possibility of a decline in continued interest in outsourced services;
•our inability to retain and attract experienced and qualified personnel;
•recovery following a catastrophic event, disaster or other business continuity problem;
•our inability to deliver a satisfactory product to our clients;
•damage to our reputation;
•our reliance on third-party licenses and service providers;
•our handling of client funds;
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•changes in regulations that could have an adverse effect on the Company’s business;
•the Company’s international operations, including varying taxation requirements;
•the profitability of our engagements due to unexpected circumstances;
•our ability to achieve sustainable cost savings for our clients;
•the success of our restructuring program;
•changes in accounting principles or treatment;
•the impact of goodwill or other impairment charges on our earnings;
•contracting with government clients;
•the significant influence of our sponsors;
•the incurrence of increased costs and becoming subject to additional regulations and requirements as a result of being a public company;
•our obligations under our Tax Receivable Agreement;
•changes to our credit ratings or interest rates which could affect our financial resources, ability to raise additional capital, generate sufficient cash flows, or generally maintain operations;
•the payment or nonpayment of dividends and/or repurchases of our common stock; and
•other risks and uncertainties indicated in this report and our other public filings, including those set forth under the section entitled “Risk Factors” in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on February 29, 2024 (the "Annual Report") and our Quarterly Report on Form 10-Q filed with the SEC on May 8, 2024.
These risk factors do not identify all risks that we face, and our business, financial condition and results of operations could also be affected by factors, events or uncertainties that are not presently known to us or that we currently do not consider to present material risks.
Website and Social Media Disclosure
We use our website (www.alight.com) and our corporate Facebook (http://www.facebook.com/AlightGlobal), Instagram (@alight_solutions), LinkedIn (www.linkedin.com/company/alightsolutions), X (@alightsolutions), and YouTube (www.youtube.com/c/AlightSolutions) accounts as channels of distribution of Company information. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, filings made with the SEC and public conference calls and webcasts. The information on our website is not part of this Quarterly Report.
The Company makes available free of charge on its website or provides a link on its website to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after those reports are electronically filed with, or furnished to, the SEC. To access these filings, go to the Company’s website and under the “Investors” heading, click on “Financials.”
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Alight, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
September 30,
2024		December 31,
2023
(in millions, except par values)
Assets
Current Assets
Cash and cash equivalents$300 $324 
Receivables, net453 435 
Other current assets186 260 
Fiduciary assets262 234 
Current assets of discontinued operations— 1,523 
Total Current Assets1,201 2,776 
Goodwill3,212 3,212 
Intangible assets, net2,925 3,136 
Fixed assets, net394 331 
Deferred tax assets, net96 38 
Other assets443 341 
Long-term assets of discontinued operations— 948 
Total Assets$8,271 $10,782 
Liabilities and Stockholders' Equity
Liabilities
Current Liabilities
Accounts payable and accrued liabilities$334 $325 
Current portion of long-term debt, net25 25 
Other current liabilities305 233 
Fiduciary liabilities262 234 
Current liabilities of discontinued operations— 1,370 
Total Current Liabilities926 2,187 
Deferred tax liabilities31 32 
Long-term debt, net2,006 2,769 
Long-term tax receivable agreement755 733 
Financial instruments67 109 
Other liabilities160 142 
Long-term liabilities of discontinued operations— 68 
Total Liabilities$3,945 $6,040 
Commitments and Contingencies
Stockholders' Equity
Preferred stock at $0.0001 par value: 1.0 shares authorized, none issued and outstanding
$— $— 
Class A Common Stock: $0.0001 par value, 1,000.0 shares authorized; 559.5 and 517.3 shares issued, and 532.4 and 510.9 shares outstanding as of September 30, 2024 and December 31, 2023, respectively
— — 
Class B Common Stock: $0.0001 par value, 20.0 shares authorized; 10.0 and 9.9 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
— — 
Class V Common Stock: $0.0001 par value, 175.0 shares authorized; 0.6 and 29.0 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
— — 
Class Z Common Stock: $0.0001 par value, 12.9 shares authorized; 0.0 and 3.4 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
— — 
Treasury stock, at cost (27.1 and 6.4 shares at September 30, 2024 and December 31, 2023, respectively)
(207)(52)
Additional paid-in-capital5,149 4,946 
Retained deficit(668)(503)
Accumulated other comprehensive income48 71 
Total Alight, Inc. Stockholders' Equity$4,322 $4,462 
Noncontrolling interest4 280 
Total Stockholders' Equity$4,326 $4,742 
Total Liabilities and Stockholders' Equity$8,271 $10,782 
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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Alight, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
(in millions, except per share amounts)2024202320242023
Revenue$555 $557 $1,652 $1,704 
Cost of services, exclusive of depreciation and amortization358 372 1,059 1,110 
Depreciation and amortization23 19 70 54 
Gross Profit174 166 523 540 
Operating Expenses
Selling, general and administrative142 136 434 436 
Depreciation and intangible amortization74 75 223 225 
Total Operating expenses216 211 657 661 
Operating Income (Loss) From Continuing Operations(42)(45)(134)(121)
Other (Income) Expense
(Gain) Loss from change in fair value of financial instruments(23)(36)(54)(11)
(Gain) Loss from change in fair value of tax receivable agreement27 11 51 30 
Interest expense19 34 83 100 
Other (income) expense, net(12)— (11)1 
Total Other (income) expense, net11 9 69 120 
Income (Loss) From Continuing Operations Before Taxes(53)(54)(203)(241)
Income tax expense (benefit)(9)(14)(34)(45)
Net Income (Loss) From Continuing Operations(44)(40)(169)(196)
Net Income (Loss) From Discontinued Operations (including gain on disposal of $4 million), Net of Tax
(30)(6)2 4 
Net Income (Loss)(74)(46)(167)(192)
Net income (loss) attributable to noncontrolling interests— 2 (2)(9)
Net Income (Loss) Attributable to Alight, Inc.$(74)$(48)$(165)$(183)
Earnings Per Share
Basic and Diluted
Continuing operations$(0.08)$(0.09)$(0.31)$(0.39)
Discontinued operations$(0.06)$(0.01)$— $0.01 
Net Income (Loss)$(0.14)$(0.10)$(0.31)$(0.38)
Net Income (Loss)$(74)$(46)$(167)$(192)
Other comprehensive income (loss), net of tax:
Change in fair value of derivatives(30)(2)(35)(8)
Foreign currency translation adjustments13 (3)8 3 
Total Other comprehensive income (loss), net of tax:(17)(5)(27)(5)
Comprehensive Income (Loss) Before Noncontrolling Interests(91)(51)(194)(197)
Comprehensive income (loss) attributable to noncontrolling interests— 1 (6)(15)
Comprehensive Income (Loss) Attributable to Alight, Inc.$(91)$(52)$(188)$(182)
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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Alight, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)

(in millions)Common
Stock		Treasury
Stock 		Additional
Paid-in
Capital 		Retained
Deficit 		Accumulated
Other
Comprehensive
Income		Total
Alight, Inc.
Equity 		Noncontrolling
Interest 		Total
Stockholders'
Equity
Balance at June 30, 2024$— $(132)$5,134 $(594)$65 $4,473 $4 $4,477 
Net income— — — (74)— (74)— (74)
Other comprehensive income, net— — — — (17)(17)— (17)
Common stock issued under ESPP— — — — — — — — 
Conversion of noncontrolling interest— — (1)— — (1)— (1)
Share-based compensation expense— — 10 — — 10 — 10 
Shares withheld in lieu of taxes— — — — — — — — 
Share repurchases— (75)— — — (75)— (75)
Other— — 6 — — 6 — 6 
Balance at September 30, 2024$— $(207)$5,149 $(668)$48 $4,322 $4 $4,326 
(in millions)Common
Stock		Treasury
Stock 		Additional
Paid-in
Capital 		Retained
Deficit 		Accumulated
Other
Comprehensive
Income		Total
Alight, Inc.
Equity 		Noncontrolling
Interest 		Total
Stockholders'
Equity
Balance at June 30, 2023$— $(26)$4,734 $(293)$100 $4,515 $439 $4,954 
Net loss— — — (48)— (48)2 (46)
Other comprehensive income (loss), net— — — — (4)(4)(1)(5)
Conversion of non-controlling interest— — 56 — — 56 (74)(18)
Share-based compensation expense— — 35 — — 35 — 35 
Shares vested, net of shares withheld in lieu of taxes— — (2)— — (2)— (2)
Share repurchases— (26)— — — (26)— (26)
Balance at September 30, 2023$— $(52)$4,823 $(341)$96 $4,526 $366 $4,892 
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(in millions)Common
Stock		Treasury
Stock 		Additional
Paid-in
Capital 		Retained
Deficit 		Accumulated
Other
Comprehensive
Loss		Total
Alight, Inc.
Equity 		Noncontrolling
Interest 		Total
Stockholders'
Equity
Balance at December 31, 2023$— $(52)$4,946 $(503)$71 $4,462 $280 $4,742 
Net income— — — (165)— (165)(2)(167)
Other comprehensive income, net— — — — (23)(23)(4)(27)
Common stock issued under ESPP— — 6 — — 6 — 6 
Conversion of noncontrolling interest— — 197 — — 197 (269)(72)
Share-based compensation expense— — 56 — — 56 — 56 
Shares withheld in lieu of taxes— — (58)— — (58)— (58)
Share repurchases— (155)— — — (155)— (155)
Other— — 2 — — 2 (1)1 
Balance at September 30, 2024$— $(207)$5,149 $(668)$48 $4,322 $4 $4,326 
(in millions)Common
Stock		Treasury
Stock 		Additional
Paid-in
Capital 		Retained
Deficit 		Accumulated
Other
Comprehensive
Loss		Total
Alight, Inc.
Equity 		Noncontrolling
Interest 		Total
Stockholders'
Equity
Balance at December 31, 2022$— $(12)$4,514 $(158)$95 $4,439 $650 $5,089 
Net income— — — (183)— (183)(9)(192)
Other comprehensive income (loss), net— — — — 1 1 (6)(5)
Common Stock issued under ESPP— — 4 — — 4 — 4 
Conversion of non-controlling interest— — 203 — — 203 (269)(66)
Share-based compensation expense— — 110 — — 110 — 110 
Shares vested, net of shares withheld in lieu of taxes— — (8)— — (8)— (8)
Share repurchases— (40)— — — (40)— (40)
Balance at September 30, 2023$— $(52)$4,823 $(341)$96 $4,526 $366 $4,892 
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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Alight, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Nine Months Ended September 30,
(in millions)20242023
Operating activities:
Net Income (Loss) From Continuing Operations$(169)$(196)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation83 69 
Intangible asset amortization210 210 
Noncash lease expense9 10 
Financing fee and premium amortization(1)(2)
Share-based compensation expense59 93 
(Gain) loss from change in fair value of financial instruments(54)(11)
(Gain) loss from change in fair value of tax receivable agreement51 30 
Release of unrecognized tax provision(1)(1)
Deferred tax expense (benefit)(75)34 
Other(4)7 
Changes in operating assets and liabilities:
Accounts receivable(19)11 
Accounts payable and accrued liabilities11 (76)
Other assets and liabilities(25)48 
Cash provided by operating activities - continuing operations75 226 
Cash provided by operating activities - discontinued operations59 25 
Net cash provided by operating activities$134 $251 
Investing activities:
Net proceeds from sale of business972 — 
Capital expenditures(95)(114)
Cash provided by (used in) investing activities - continuing operations877 (114)
Cash used in investing activities - discontinued operations(11)(13)
Net cash provided by (used in) investing activities$866 $(127)
Financing activities:
Net increase (decrease) in fiduciary liabilities28 (36)
Repayments to banks(759)(19)
Principal payments on finance lease obligations(22)(17)
Payments on tax receivable agreements(62)(7)
Tax payment for shares/units withheld in lieu of taxes(58)(8)
Deferred and contingent consideration payments— (9)
Repurchase of shares(155)(40)
Other financing activities— 1 
Cash used for financing activities - continuing operations(1,028)(135)
Cash provided by (used in) financing activities - discontinued operations22 (154)
Net Cash provided by (used in) financing activities$(1,006)$(289)
Effect of exchange rate changes on cash, cash equivalents and restricted cash - continuing operations1 — 
Effect of exchange rate changes on cash, cash equivalents and restricted cash - discontinued operations(3)1 
Net increase (decrease) in cash, cash equivalents and restricted cash(8)(164)
Cash, cash equivalents and restricted cash balances from:
Continuing operations - beginning of year$558 $482 
Discontinued operations - beginning of year(a)
1,201 1,277 
Less discontinued operations - end of period(a)
— 1,126 
Less fiduciary cash transferred with sale of business1,189 — 
Continuing operations - end of period$562 $469 
(a)Reported as discontinued operations on our condensed consolidated balance sheets.
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets
Cash and cash equivalents$300 $250 
Restricted cash included in fiduciary assets262 219 
Total cash, cash equivalents and restricted cash$562 $469 
Supplemental disclosure of non-cash investing and financing activities:
Fixed asset additions acquired through finance leases$52 $4 
Right of use asset additions acquired through operating leases8 3 
The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.
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Alight, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Basis of Presentation and Nature of Business
Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and should be read in conjunction with the Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”) on February 29, 2024. In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair presentation have been included. All intercompany transactions and balances have been eliminated upon consolidation.
On July 2, 2021 (the “Closing Date”), Alight Holding Company, LLC (the "Predecessor" or "Alight Holdings") completed a business combination (the "Business Combination") with a special purpose acquisition company. On the Closing Date, pursuant to the Business Combination Agreement, the special purpose acquisition company became a wholly owned subsidiary of Alight, Inc. (“Alight”, the “Company”, “we” “us” “our” or the “Successor”). As of September 30, 2024, Alight owned approximately 99% of the economic interest in the Predecessor, had 100% of the voting power and controlled the management of the Predecessor. The non-voting ownership percentage held by noncontrolling interest was less than 1% as of September 30, 2024.
On July 12, 2024, Alight, Inc. (together with its subsidiaries, the “Company” or “Alight”) and Tempo Acquisition LLC, a subsidiary of the Company, completed the previously announced sale (the “Transaction”) of Alight’s Professional Services segment and Alight’s Payroll & HCM Outsourcing business within the Employer Solutions segment (collectively, the “Divested Business”) to Axiom Buyer, LLC, a newly-formed entity and an affiliate of H.I.G. Capital, L.L.C. (“Buyer”), pursuant to the terms of the Stock and Asset Purchase Agreement (the “Purchase Agreement”), dated as of March 20, 2024. As a result of this agreement, the results of the Company’s Payroll and Professional Services businesses are reported separately as discontinued operations, net of tax, in our condensed consolidated statements of comprehensive income (loss) and our condensed consolidated balance sheets for all periods presented as of September 30, 2024. While the Closing Date was July 12, 2024, we determined the impact of eleven days was immaterial to the Company's results of operations. As such, we utilized July 1, 2024 as the date of the sale for accounting purposes.
Nature of Business
We are a leading cloud-based provider of integrated digital human capital and business solutions. We have an unwavering belief that a company’s success starts with its people, and our solutions connect human insights with technology. The Alight Worklife® employee engagement platform provides a seamless customer experience by combining content, plus artificial intelligence (“AI”) and data analytics to enable Alight’s business process as a service ("BPaaS") model. Our mission-critical solutions enable employees to enrich their health, wealth and wellbeing, which helps global organizations achieve a high-performance culture.
Our primary business, Employer Solutions, is driven by our Alight Worklife platform, and includes total employee wellbeing, integrated benefits administration, healthcare navigation, financial wellbeing, leaves solutions, and retiree healthcare. We leverage data across all interactions and activities to improve the employee experience, reduce operational costs and better inform management processes and decision-making. Our clients’ employees benefit from an integrated platform and user experience, coupled with a full-service customer care center, helping them manage the full life cycle of their health wealth and wellbeing.
2. Accounting Policies and Practices
Significant Accounting Policies
There have been no material changes to our significant accounting policies from our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Use of Estimates
The preparation of the accompanying Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses.
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These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be predicted with certainty, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the financial statements in future periods.
New Accounting Pronouncements Not Yet Adopted
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the standard to determine the impact of adoption to its condensed consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating the standard to determine the impact of adoption to its condensed consolidated financial statements and disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (Topic 220), which requires disclosure in the notes to financial statements of specified information about certain costs and expenses. This guidance will be effective for the annual periods beginning the year ended December 31, 2027. Early adoption is permitted. Upon adoption, the guidance may be applied retrospectively or prospectively. The Company is currently evaluating the standard to determine the impact of adoption to its condensed consolidated financial statements and disclosures.
3. Revenue from Contracts with Customers
The majority of the Company’s revenue is highly recurring and is derived from contracts with customers to provide integrated, cloud-based human capital solutions that empower clients and their employees to manage their health, wealth and HR needs. The Company’s revenues are disaggregated by recurring and project revenues within each reportable segment. Recurring revenues are typically longer term in nature and more predictable on an annual basis, while project revenues consist of project work of a shorter duration and are therefore less predictable on an annual basis. See Note 12 “Segment Reporting” for quantitative disclosures of recurring and project revenues by reportable segment. The Company’s reportable segment is Employer Solutions. Employer Solutions is driven by our digital, software and AI-led capabilities powered by the Alight Worklife® platform and spanning total employee wellbeing and engagement, including integrated benefits administration, healthcare navigation, financial health and employee wellbeing. The Company believes the revenue categories within Employer Solutions depict how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.
Revenues are recognized when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. The majority of the Company’s revenue is recognized over time as the customer simultaneously receives and consumes the benefits of our services. We may occasionally be entitled to a fee based on achieving certain performance criteria or contract milestones. To the extent that we cannot estimate with reasonable assurance the likelihood that we will achieve the performance target, we will constrain this portion of the transaction price and recognize it when or as the uncertainty is resolved. Any taxes assessed on revenues relating to services provided to our clients are recorded on a net basis. All of the Company’s revenues are described in more detail below.
Administrative Services
We provide benefits and human resource services across all of our solutions, which are highly recurring. The Company’s contracts may include administration services across one or multiple solutions and typically have three to five-year terms with mutual renewal options.
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These contracts typically consist of an implementation phase and an ongoing administration phase:
Implementation phase – In connection with the Company’s long-term agreements, implementation efforts are often necessary to set up clients and their human resource or benefit programs on the Company’s systems and operating processes. Work performed during the implementation phase is considered a set-up activity because it does not transfer a service to the customer. Therefore, it is not a separate performance obligation. As these agreements are longer term in nature, our contracts generally provide that if the client terminates a contract, we are entitled to an additional payment for services performed through the termination date designed to recover our up-front costs of implementation. Any fees received from the customer as part of the implementation are, in effect, an advance payment for the future ongoing administration services to be provided.
Ongoing administration services phase – For all solutions, the ongoing administration phase includes a variety of plan and system support services. More specifically, these services include data management, calculations, reporting, fulfillment/communications, compliance services, call center support, and in our Health Solutions agreements, annual on-boarding and enrollment support. While there are a variety of activities performed across all solutions, the overall nature of the obligation is to provide integrated administration solutions to the customer. The agreement represents a stand-ready obligation to perform these activities across all solutions on an as-needed basis. The customer obtains value from each period of service, and each time increment (i.e., each month, or each benefit cycle in the case of our Health Solutions arrangements) is distinct and the activities are performed substantially the same. Accordingly, the ongoing administration services for each solution represents a series and each series (i.e., each month, or each benefit cycle including the enrollment period in the case of our Health Solutions arrangements) of distinct services are deemed to be a single performance obligation. In agreements that include multiple performance obligations, the transaction price related to each performance obligation is based on a relative stand-alone selling price basis. We establish the stand-alone selling price using a suitable estimation method, which includes a market assessment approach using observable market prices the Company charges separately for similar solutions to similar customers, or an expected cost plus margin approach.
Our contracts with our clients specify the terms and conditions upon which the services are based. Fees for these services are primarily based on a contracted fee charged per participant per period (e.g., monthly or annually, as applicable). These contracts may also include fixed components, including lump-sum implementation fees. Our fees are not typically payable until the commencement of the ongoing administration phase. Once fees become payable, payment is typically due on a monthly basis as we perform under the contract, and we are entitled to be reimbursed for work performed to date in the event of termination.
For Health Solutions administration services, each benefits cycle inclusive of the enrollment period represents a time increment under the series guidance and is a single performance obligation. Although ongoing fees are typically not payable until the commencement of the ongoing administrative phase, we begin transferring services to our customers approximately four months prior to payments being due as part of our annual enrollment services. Although our per-participant fees are considered variable, they are typically predictable in nature, and therefore we do not generally constrain any portion of our transaction price estimates. We use an input method based on the labor costs incurred relative to total labor costs as the measure of progress in satisfying our Health Solutions performance obligation commencing when the customer’s annual enrollment services begin. Given that the Health Solutions enrollment and administrative services are stand-ready in nature, it can be difficult to estimate the total expected efforts or hours we will incur for a particular benefits cycle. Therefore, the input measure is based on the historical effort expended, which is measured as labor cost.
In the normal course of business, we enter into change orders or other contract modifications to add or modify services provided to the customer. We evaluate whether these modifications should be accounted for as separate contracts or a modification to an existing contract. To the extent that the modification changes a promise that forms part of the underlying series, the modification is not accounted for as a separate contract.
Other Contracts
In addition to the ongoing administration services, the Company also has services across all solutions that represent separate performance obligations and that are often shorter in duration, such as our participant financial advisory services and enrollment services not bundled with ongoing administration services.
Fee arrangements can be in the form of fixed-fee, time-and-materials, or fees based on assets under management. Payment is typically due on a monthly basis as we perform under the contract, and we are entitled to be reimbursed for work performed to date in the event of termination.
Services may represent stand-ready obligations that meet the series provision, in which case all variable consideration is allocated to each distinct time increment.
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Other services are recognized over-time based on a method that faithfully depicts the transfer of value to the customer, which may be based on the value of labor hours worked or time elapsed, depending on the facts and circumstances.
The majority of the fees for enrollment services not bundled with ongoing administration services may be in the form of commissions received from insurance carriers for policy placement and are variable in nature. These annual enrollment services include both employer-sponsored arrangements that place both retiree Medicare coverage and voluntary benefits and direct-to-consumer Medicare placement. Our performance obligations under these annual enrollment services are typically completed over a short period upon which a respective policy is placed or confirmed with no ongoing fulfillment obligations. For both the employer-sponsored and direct-to-consumer arrangements, we recognize the majority of the placement revenue in the fourth quarter of the calendar year, which is when most of the placement or renewal activity occurs. However, the Company may continue to receive commissions from carriers until the respective policy lapses or is canceled. The Company bases the estimates of total transaction price on supportable evidence from an analysis of past transactions, and only includes amounts that are probable of being received or not refunded.
As it relates to the direct-to-consumer arrangements, because our obligation is complete upon placement of the policy, we recognize revenue at that date, which includes both compensation due to us in the first year as well as an estimate of the total renewal commissions that will be received over the lifetime of the policy. The variable consideration estimate requires significant judgement, and will vary based on product type, estimated commission rates and the expected lives of the respective policies and other factors.
For both the employer-sponsored and direct-to-customer arrangements, the estimated total transaction price may differ from the ultimate amount of commissions we may collect. Consequently, the estimate of total transaction price is adjusted over time as the Company receives confirmation of cash received, or as other information becomes available.
A portion of the Company's revenue is subscription-based where monthly fees are paid to the Company. The subscription-based revenue is recognized straight-line over the contract term, which is generally three years.
The Company has elected to apply practical expedients to not disclose the revenue related to unsatisfied performance obligations if (1) the contract has an original duration of one year or less, or (2) the variable consideration is allocated entirely to an unsatisfied performance obligation which is recognized as a series of distinct goods and services that form a single performance obligation.
Contract Costs
Costs to obtain a Contract
The Company capitalizes incremental costs to obtain a contract with a customer that are expected to be recovered. Assets recognized for the costs to obtain a contract, which primarily includes sales commissions paid in relation to the initial contract, are amortized over the expected life of the underlying customer relationships, which is generally 7 years for our leaves solutions and generally 15 years for all of our other solutions. For situations where the duration of the contract is 1 year or less, the Company has applied a practical expedient and recognized the costs of obtaining a contract as an expense when incurred. These costs are recorded in Cost of services, exclusive of depreciation and amortization in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Costs to fulfill a Contract
The Company capitalizes costs to fulfill contracts which includes highly customized implementation efforts to set up clients and their human resource or benefit programs. Assets recognized for the costs to fulfill a contract are amortized on a systematic basis over the expected life of the underlying customer relationships, which is generally 7 years for our leaves solutions and generally 15 years for all of our other solutions. Amortization for all contracts costs is recorded in Cost of services, exclusive of depreciation and amortization in the Condensed Consolidated Statements of Comprehensive Income (Loss), see Note 5 “Other Financial Data”.
4. Discontinued Operations
As disclosed above in Note 1 “Basis of Presentation and Nature of Business”, on July 12, 2024, the Company closed on its previously announced sale of the Divested Business.
Under the terms of the Purchase Agreement, the Buyer agreed to acquire the Divested Business (or "Strada") for total consideration of up to $1.2 billion, in the form of (1) $1.0 billion in cash (the “Closing Cash Consideration”) payable at the closing of the transactions (the “Closing”) contemplated by the Purchase Agreement, (2) a note with an aggregate principal amount of $50 million and fair value of $35 million as of July 12, 2024 issued at Closing (the “Seller Note”) by an indirect parent of Buyer (the “Note Issuer”) and (3) contingent upon the financial performance of the Divested Business
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for the 2025 fiscal year, a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) and fair value of $52 million as of July 12, 2024 to be issued by the Note Issuer. The Seller Note has a stated interest rate of 8.0%.
In conjunction with the Transaction, the Company entered into a Transition Services Agreement (the "TSA") with the Buyer. The TSA outlines the terms under which the Company will provide certain reimbursable post-closing services to support the business on a transitional basis and are anticipated to be provided for an initial period of up to 18 months, with the option to extend for an additional six months. As part of the TSA agreement, $15 million of the Closing Cash Consideration payable at closing will be accounted for as a prepayment to the Company for services provided under the TSA.
During each of the three and nine months ended September 30, 2024, TSA services income of $9 million was recognized in Other (income) expense, net, with the corresponding expenses recorded in Cost of services and Selling, general and administrative expense in the condensed consolidated statement of comprehensive income (loss).
During each of the three and nine months ended September 30, 2024, pass-through costs of approximately $22 million were incurred under the TSA, and were netted against the equal and offsetting reimbursement amounts due from Strada.
Revenue earned during each of the three and nine months ended September 30, 2024 from customer care commercial services provided to Strada was $11 million.
A gain on sale of Strada of $4 million, net of tax, was recorded upon closing of the sale and reflects the impact of the excess of the net proceeds received less cost to sell over the carrying value of the Strada net assets. Post-closing selling price adjustment and completion of other Purchase Agreement provisions in connection with the sale could result in further adjustments to the gain on sale amount.
The following tables presents the carrying value of assets and liabilities for the Payroll & Professional Services business as presented within assets and liabilities of discontinued operations on our condensed consolidated balance sheets and results as reported in Income (Loss) from Discontinued Operations, Net of Tax, within our Condensed Consolidated Statements of comprehensive Income (Loss) (in millions):
September 30,
2024		December 31,
2023
Assets
Cash and cash equivalents$— $34 
Receivables, net— 263 
Other current assets— 59 
Fiduciary assets— 1,167 
Current assets, discontinued operations— 1,523 
Goodwill— 331 
Intangible assets, net— 418 
Fixed assets, net— 40 
Deferred tax assets, net— 3 
Other assets— 156 
Long-term assets, discontinued operations$— $948 
Liabilities
Accounts payable and accrued liabilities$— $119 
Other current liabilities— 84 
Fiduciary liabilities— 1,167 
Current liabilities, discontinued operations— 1,370 
Other liabilities— 68 
Long-term liabilities, discontinued operations$— $68 
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Three Months Ended
September 30		Nine Months Ended
September 30,
2024202320242023
Revenue$33 $256 $539 $746 
Cost of services, exclusive of depreciation and amortization33 163 387 508 
Depreciation and amortization— 2 3 7 
Gross Profit— 91 149 231 
Operating Expenses
Selling, general and administrative— 41 89 119 
Depreciation and intangible amortization— 9 8 29 
Total Operating Expenses— 50 97 148 
Income (loss) from Discontinued Operations— 41 52 83 
Other (income) expense, net— 2 2 8 
Income (Loss) from Discontinued Operations Before Income Taxes— 39 50 75 
Gain on sale of disposition, net of tax4 — 4 — 
Income tax expense (benefit)34 45 52 71 
Net Income (Loss) from Discontinued Operations, Net of Tax$(30)$(6)$2 $4 
The Company concluded that it controlled a portion of Strada services subsequent to separation as a result of certain shared contractual relationships that had not been legally assigned as of September 30, 2024. As such, the Company determined it was the principal for these services and, therefore, during each of the three and nine months ended September 30, 2024, the Company recorded $33 million of Revenue and Cost of services on a gross basis within discontinued operations in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
The additional income tax expense of $34 million recorded for the three and nine months ended September 30, 2024 is due to application of the dual consolidated loss rules as a result of the filing of the federal tax return during the interim period. The application of the dual consolidated loss rule was impacted by the sale of the Divested Business, which disallowed foreign losses previously elected.
The expense amounts reflected above represent only the direct costs attributable to the Payroll & Professional Services business and excludes allocations of corporate costs that will be retained following the sale. Neither the discontinued operations presented above, nor continuing operations, reflect the impact of any cost reimbursement that will be received under the TSA following the close of the transaction upon the satisfaction or waiver of closing conditions.

5. Other Financial Data
Condensed Consolidated Balance Sheets Information
Receivables, net
The components of Receivables, net are as follows (in millions):
September 30,
2024		December 31,
2023
Billed and unbilled receivables$463 $442 
Allowance for expected credit losses(10)(7)
Balance at end of period$453 $435 
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Other current assets
The components of Other current assets are as follows (in millions):
September 30,
2024		December 31,
2023
Deferred project costs$23 $20 
Prepaid expenses67 48 
Commissions receivable34 107 
Other62 85 
Total$186 $260 
Other assets
The components of Other assets are as follows (in millions):
September 30,
2024		December 31,
2023
Deferred project costs$255 $240 
Operating lease right of use asset52 55 
Commissions receivable17 22 
Other119 24 
Total$443 $341 
The current and non-current portions of deferred project costs relate to costs to obtain and fulfill contracts (see Note 3 “Revenue from Contracts with Customers”). Total amortization expense related to deferred project costs were $6 million and $6 million, for the three months ended September 30, 2024 and 2023, respectively, and were $18 million and $18 million, for the nine months ended September 30, 2024 and 2023, respectively, and were recorded in Cost of services, exclusive of depreciation and amortization in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
Other current assets and Other assets include the fair value of outstanding derivative instruments related to interest rate swaps. The interest rate swap balances in Other current assets as of September 30, 2024 and December 31, 2023 were $26 million and $60 million, respectively. As of September 30, 2024 and December 31, 2023, the interest rate swap balances in Other assets also included $4 million and $17 million, respectively (see Note 13 “Derivative Financial Instruments” for additional information). Other assets also includes the Seller Note and Additional Seller Note (see Note 4 "Discontinued Operations" for additional information). As of September 30, 2024, the balances in Other assets includes $36 million related to the Seller Note and $72 million from the Additional Seller Note.
Other current liabilities
The components of Other current liabilities are as follows (in millions):
September 30,
2024		December 31,
2023
Deferred revenue$73 $97 
Operating lease liabilities20 27 
Finance lease liabilities18 10 
Other194 99 
Total$305 $233 
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Other liabilities
The components of Other liabilities are as follows (in millions):
September 30,
2024		December 31,
2023
Deferred revenue$41 $45 
Operating lease liabilities59 65 
Finance lease liabilities33 6 
Other27 26 
Total$160 $142 
The current and non-current portions of deferred revenue relate to consideration received in advance of performance under client contracts. During the nine months ended September 30, 2024 and 2023, revenue of approximately $68 million and $92 million was recognized that was recorded as deferred revenue at the beginning of each period, respectively.
Other current liabilities as of September 30, 2024 and December 31, 2023 included the current portion of tax receivable agreement liability of $119 million and $62 million, respectively (see Note 15 "Tax Receivable Agreement" for additional information).
Other current liabilities and Other liabilities include the fair value of outstanding derivative instruments related to interest rate swaps. There were no interest rate swaps recorded in Other current liabilities as of both September 30, 2024 and December 31, 2023. The balance in Other liabilities as of each of September 30, 2024 and December 31, 2023 was $3 million (see Note 13 “Derivative Financial Instruments” for additional information).
6. Goodwill and Intangible assets, net
The changes in the net carrying amount of goodwill are as follows (in millions):
Total
Balance as of December 31, 2023$3,212 
Foreign currency translation— 
Balance at September 30, 2024$3,212 
Intangible assets by asset class are as follows (in millions):
September 30, 2024December 31, 2023
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Intangible assets:
Customer-related and contract based intangibles$3,192 $689 $2,503 $3,192 $529 $2,663 
Technology related intangibles230 123 107 230 94 136 
Trade name408 93 315 408 71 337 
Total$3,830 $905 $2,925 $3,830 $694 $3,136 
Amortization expense from finite-lived intangible assets for each of the three months ended September 30, 2024 and 2023 was $70 million and $69 million, respectively. Amortization expense from finite-lived intangible assets for the nine months ended September 30, 2024 and 2023 was $210 million and $210 million, respectively. Amortization expense from finite-lived intangible assets was recorded in Depreciation and intangible amortization in the Condensed Consolidated Statements of Comprehensive Income (Loss).
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The following table reflects intangible assets net carrying amount and weighted-average remaining useful lives as of September 30, 2024 and December 31, 2023 (in millions, except for years):
September 30, 2024December 31, 2023
Net
Carrying
Amount		Weighted-Average
Remaining
Useful Lives		Net
Carrying
Amount		Weighted-Average
Remaining
Useful Lives
Intangible assets:
Customer-related and contract-based intangibles$2,503 11.7$2,663 12.5
Technology-related intangibles107 2.8136 3.5
Trade name315 11.7337 12.4
Total$2,925 $3,136 
Subsequent to September 30, 2024, the annual amortization expense is expected to be as follows (in millions):
Customer-Related
and Contract Based
Intangibles		Technology
Related
Intangibles		Trade
Name
Intangibles		Total
2024 (October - December)$53 $10 $7 $70 
2025214 39 28 281 
2026214 38 27 279 
2027214 19 27 260 
2028214 1 27 242 
Thereafter1,594 — 199 1,793 
Total amortization expense$2,503 $107 $315 $2,925 
7. Income Taxes
The Company’s effective tax rates for the three months ended September 30, 2024 and 2023 were 17% and 26%, respectively. The Company's effective tax rates for the nine months ended September 30, 2024 and 2023 were 17% and 19%, respectively. The effective tax rates for each of the three and nine months ended September 30, 2024 were lower than the 21% U.S. statutory corporate income tax rate and primarily driven by the Company’s non-deductible portion of share-based compensation expense, the tax receivable agreement fair value adjustment, and the seller earnout liability fair value adjustment. The effective tax rates for each of the three and nine months ended September 30, 2023 were higher and lower than the 21% U.S. statutory corporate income tax rate, respectively. These differences were primarily driven by the Company’s non-deductible portion of share-based compensation expense, tax receivable agreement fair value adjustment, and the seller earnout liability fair value adjustment.
8. Debt
Debt outstanding consisted of the following (in millions):
Maturity DateSeptember 30,
2024		December 31,
2023
Sixth Incremental Term Loans(1)
August 31, 2028$2,031 $— 
Fifth Incremental Term Loans(2)
August 31, 2028— 2,488 
Secured Senior NotesJune 1, 2025— 306 
$300 million Revolving Credit Facility, Amended
August 31, 2026— — 
Total debt, net2,031 2,794 
Less: current portion of long-term debt, net(25)(25)
Total long-term debt, net$2,006 $2,769 
_______________________________________________________
(1)The net balance for the Sixth Incremental Term Loans includes unamortized debt issuance costs at September 30, 2024 of approximately $6 million.
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(2)The net balance for the Fifth Incremental Term Loans includes unamortized debt issuance costs at December 31, 2023 of approximately $8 million.
Term Loan
In May 2017, the Company entered into a 7 year Initial Term Loan. During November 2017 and November 2019, the Company entered into Incremental Term Loans under identical terms as the Initial Term Loan. In August 2020, the Company refinanced a portion of the Term Loan by paying down $270 million of principal using the proceeds from the August 2020 Unsecured Senior Notes issuance, extending the maturity date on $1,986 million of the balance to October 31, 2026, and adding an interest rate floor of 50 bps (the "Amended Term Loan"). As part of the consideration transferred in the Business Combination, $556 million of principal was repaid on the portion of the Term Loan that was not amended. In August 2021, the Company entered into a new Third Incremental Term Loan facility for $525 million that matures August 31, 2028. In January 2022, the Company refinanced the Amended Term Loan and the Third Incremental Term Loan to have a concurrent maturity date of August 31, 2028 and updated interest rate terms as described below (the "B-1 Term Loan"). In September 2023, the Company refinanced the remaining portion of the 7 year Term Loan in full by increasing the existing B-1 Term Loan by approximately $65 million under identical terms as the B-1 Term Loan.
Interest rates on the B-1 Term Loan borrowings are based on the Secured Overnight Financing Rate ("SOFR") plus a margin. The Company is required to make principal payments at the end of each fiscal quarter based on defined terms in the agreement with the remaining principal balances due on the maturity dates.
In September 2023, the Company entered into Amendment No. 9 to Credit Agreement with a syndicate of lenders to establish a new class of Fifth Incremental Term Loans with an aggregate principal amount of $2,507 million to reprice the outstanding Initial Term B-1 Loans due August 31, 2028 by reducing the applicable rate from SOFR + 3.00% to SOFR + 2.75%.
In June 2024, the Company entered into Amendment No. 10 to Credit Agreement with a syndicate of lenders to establish a new class of Sixth Incremental Term Loans with an aggregate principal amount of $2,489 million to reprice the outstanding Fifth Incremental Term Loans due August 31, 2028 by reducing the applicable rate from SOFR + 2.75% to SOFR + 2.25%.
The Company utilized swap agreements to fix a portion of the floating interest rates through December 2026 (see Note 13 “Derivative Financial Instruments”).
During the three and nine months ended September 30, 2024, the Company made total principal payments of $6 million and $19 million, respectively. During the three and nine months ended September 30, 2023 the Company made total principal payments $6 million and $19 million, respectively.
In July 2024, the Company paid down $440 million of the Sixth Incremental Term Loans principal balance with proceeds from the Transaction. The Company recognized a loss on debt extinguishment of $1 million related to this prepayment of a portion of the Sixth Incremental Term Loans. Loss on debt extinguishment is recorded in Interest expense in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Secured Senior Notes
In May 2020, the Company issued $300 million of Secured Senior Notes. These Secured Senior Notes have a maturity date of June 1, 2025 and accrue interest at a fixed rate of 5.75% per annum, payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2020.
In July 2024, the Company fully repaid the Secured Senior Notes principal balance of $300 million with proceeds from the Transaction. The Company recognized a gain on debt extinguishment of $4 million related to the prepayment in full of the Secured Senior Notes. Gain on debt extinguishment is recorded in Interest expense in the Condensed Consolidated Statements of Comprehensive Income (Loss).
Revolving Credit Facility
In May 2017, the Company entered into a 5-year $250 million revolving credit facility with a multi-bank syndicate with a maturity date of May 1, 2022. During August 2020, the Company extended the maturity date for $226 million of the revolving credit facility to October 31, 2024. In August 2021, the Company replaced and refinanced the revolving credit facilities with a $294 million revolving credit facility with a maturity date of August 31, 2026. In March 2023, the Company amended and upsized the revolving credit facility to $300 million and updated the benchmark reference rate from LIBOR to Term SOFR. No changes were made to the maturity date. At September 30, 2024, an immaterial amount of unused letters of credit related to various insurance policies and real estate leases were issued under the revolving credit facility and there were no borrowings. The Company is required to make periodic payments for
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commitment fees and interest related to the revolving credit facility and outstanding letters of credit. During the three and nine months ended September 30, 2024 and 2023, the Company made immaterial payments related to these fees.
Financing Fees, Premiums and Interest Expense
The Company capitalized financing fees and premiums related to the Term Loan, Revolver and Secured Senior Notes issued. These financing fees and premiums were recorded as an offset to the aggregate debt balances and are being amortized over the respective loan terms.
Total interest expense related to the debt instruments for the three months ended September 30, 2024 and 2023 was $40 million and $57 million, respectively, which included a $2 million benefit and an immaterial amount for the three months ended September 30, 2024 and 2023, respectively. Total interest expense related to the debt instruments for the nine months ended September 30, 2024 and 2023 was $149 million and $163 million, respectively, which included a benefit of $3 million and $1 million for each of the nine months ended September 30, 2024 and 2023, respectively. Interest expense is recorded in Interest expense in the Condensed Consolidated Statements of Comprehensive Income (Loss), and is net of interest rate swap derivative gains recognized.
Principal Payments
Aggregate remaining contractual principal payments as of September 30, 2024 are as follows (in millions):
2024$6 
202525 
202625 
202725 
20281,955 
Total payments$2,036 
9. Stockholders' Equity
Preferred Stock
Upon the Closing Date of the Business Combination, 1,000,000 preferred shares, par value $0.0001 per share, were authorized. There were no preferred shares issued and outstanding as of September 30, 2024.
Class A Common Stock
As of September 30, 2024, 532,444,353 shares of Class A Common Stock were outstanding. On July 2, 2024, all remaining shares of unvested Class A Common Stock became fully vested. Holders of shares of Class A Common Stock are entitled to one vote per share, and together with the holders of shares of Class B Common Stock, will participate ratably in any dividends that may be declared by the Company’s Board of Directors.
Class B Common Stock
Upon the Closing Date of the Business Combination, certain equity holders of Alight Holdings received earnouts (the "Seller Earnouts") that resulted in the issuance of a total of 14,999,998 Class B instruments to the equity holders of the Predecessor. The equity holders of the Predecessor that exchanged their Predecessor Class A units for shares of Class A Common Stock in the Business Combination received shares of Class B Common Stock, and the equity holders of the Predecessor that continue to hold Class A units of Alight Holdings (“Continuing Unit holders”) received Class B common units of Alight Holdings.
The Class B Common Stock and Class B common units are not entitled to a vote and accrue dividends equal to amounts declared per corresponding share of Class A Common Stock and Class A unit; however, such dividends are paid if and when such share of Class B Common Stock or Class B unit converts into a share of Class A Common Stock or Class A unit. If any of the shares of Class B Common Stock or Class B common units do not vest on or before the seventh anniversary of the Closing Date, such shares or units will be automatically forfeited and cancelled for no consideration and will not be entitled to receive any cumulative dividend payments.
These Class B instruments are liability classified; refer to Note 14 “Financial Instruments” for additional information. As further described below, there are two series of Class B instruments outstanding.
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Class B-1
As of September 30, 2024, 4,978,807 shares of Class B-1 Common Stock were legally issued and outstanding. Shares of Class B-1 Common Stock vest and automatically convert into shares of Class A Common Stock on a 1-for-1 basis if the volume weighted average price (“VWAP”) of the shares of Class A Common Stock equals or exceeds $12.50 per share for 20 or more trading days within a consecutive 30-trading day period (or in the event of a change of control or liquidation event that implies a $12.50 per share valuation on a diluted basis).
As of September 30, 2024, 2,521,192 Class B-1 common units of Alight Holdings were legally issued and outstanding. Class B-1 common units vest and automatically convert into Class A common units of Alight Holdings on a 1-for-1 basis if the VWAP of the shares of Class A Common Stock equals or exceeds $12.50 per share for 20 or more trading days within a consecutive 30-trading day period (or in the event of a change of control or liquidation event that implies a $12.50 per share valuation on a diluted basis).
Class B-2
As of September 30, 2024, 4,978,807 shares of Class B-2 Common Stock were legally issued and outstanding. Shares of Class B-2 Common Stock vest and automatically convert into shares of Class A Common Stock on a 1-for-1 basis if the VWAP of the shares of Class A Common Stock equals or exceeds $15.00 per share for 20 or more trading days within a consecutive 30-trading day period (or in the event of a change of control or liquidation event that implies a $15.00 per share valuation on a diluted basis).
As of September 30, 2024, 2,521,192 Class B-2 common units of Alight Holdings were legally issued and outstanding. Class B-2 common units vest and automatically convert into Class A common units of Alight Holdings on a 1-for-1 basis if the VWAP of the shares of Class A Common Stock equals or exceeds $15.00 per share for 20 or more trading days within a consecutive 30-trading day period (or in the event of a change of control or liquidation event that implies a $15.00 per share valuation on a diluted basis).
Class B-3
Upon the Closing Date of the Business Combination, 10,000,000 shares of Class B-3 Common Stock, par value $0.0001, were authorized. There are no shares of Class B-3 Common Stock issued and outstanding as of September 30, 2024.
Class V Common Stock
As of September 30, 2024, 560,433 shares of Class V Common Stock were legally issued and outstanding. Holders of Class V Common Stock are entitled to one vote per share and have no economic rights. The Class V Common Stock is held on a 1-for-1 basis with Class A Units in Alight Holdings held by Continuing Unit holders. The Class A Units, together with an equal number of shares of Class V Common Stock, can be exchanged for an equal number of shares of Class A Common Stock.
Class Z Common Stock
Upon the Closing Date of the Business Combination, a total of 8,671,507 Class Z instruments were issued to the equity holders of the Predecessor. The equity holders of the Predecessor that exchanged their Predecessor Class A units for shares of Class A Common Stock in the Business Combination received shares of Class Z Common Stock, and the Continuing Unit holders received Class Z common units of Alight Holdings. The Class Z instruments were issued to the equity holders of the Predecessor to allow for the re-allocation of the consideration paid to the holders of unvested management equity (i.e., the unvested shares of Class A, Class B-1, and Class B-2 Common Stock) to the equity holders of the Predecessor in the event such equity is forfeited under the terms of the applicable award agreement and vested in connection with any such forfeiture.
As of September 30, 2024, there were no outstanding shares of Class Z Common Stock, as all remaining shares of Class Z Common Stock became fully vested on July 2, 2024 and the vested shares were converted into shares of either Class A, Class B-1 and B-2 Common Stock in connection with the ultimate forfeiture of the shares of unvested Class A, Class B-1 and B-2 common stock issued to participating management holders, as applicable.
Similarly, as of September 30, 2024, there were no outstanding Class Z common units as all remaining Class Z common units became fully vested on July 2, 2024 and vested units were converted into either Alight Holdings Class A, Class B-1 and B-2 common units in connection with the ultimate forfeiture of the shares of unvested Class A, Class B-1, and Class B-2 common stock issued to participating management holders, as applicable.
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Class A Units
Holders of Alight Holdings Class A units can exchange all or any portion of their Class A units, together with the cancellation of an equal number of shares of Class V Common Stock, for a number of shares of Class A Common Stock equal to the number of exchanged Class A units. Alight has the option to cash settle any future exchange.
The Continuing Unit holders’ ownership of Class A units represents the noncontrolling interest of the Company, which is accounted for as permanent equity on the Condensed Consolidated Balance Sheets. As of September 30, 2024, there were 533,004,786 Class A Units outstanding, of which 532,444,353 are held by the Company and 560,433 are held by the noncontrolling interest of the Company.
The Alight Holdings limited liability company agreement contains provisions which require that a one-to-one ratio is maintained between each class of Alight Holdings units held by Alight and its subsidiaries (including the Alight Group, Inc. and certain tax blocker entities, but excluding subsidiaries of Alight Holdings) and the number of outstanding shares of the corresponding class of Alight common stock, subject to certain exceptions (including in respect of management equity in the form of options, rights or other securities which have not been converted into or exercised for Alight common stock). In addition, the Alight Holdings limited liability company agreement permits Alight, in its capacity as the managing member of Alight Holdings, to take actions to maintain such ratio, including undertaking stock splits, combinations, recapitalization and exercises of the exchange rights of holders of Alight Holdings units.
Exchange of Class A Units
During the nine months ended September 30, 2024, 28,937,401 Class A units and a corresponding number of shares of Class V Common Stock were exchanged for Class A Common Stock. As a result of the exchanges, Alight, Inc. increased its ownership in Alight Holdings and accordingly increased its equity by approximately $273 million, recorded in Additional paid-in capital. Pursuant to the Tax Receivable Agreement (the "TRA") that we entered into in connection with the Business Combination, described in Note 15 "Tax Receivable Agreement," the Class A unit exchanges created additional TRA liabilities of $90 million, with offsets to Additional paid-in-capital. An $18 million increase to Additional paid-in-capital was due to exchanges as a result of deferred tax assets due to our change in ownership.
Share Repurchase Program
On August 1, 2022, the Company's Board of Directors authorized a share repurchase program (the "Program"), under which the Company may repurchase issued and outstanding shares of Class A Common Stock from time to time, depending on market conditions and alternate uses of capital. The Program has no expiration date and may be suspended or discontinued at any time. The Program does not obligate the Company to purchase any particular number of shares and there is no guarantee as to any number of shares being repurchased by the Company. On March 20, 2024, the Company’s Board of Directors authorized the repurchase of up to an additional $200 million of the Company’s Class A common stock. As of September 30, 2024, the total remaining amount authorized for repurchase was $93 million.
On June 18, 2024, the Company announced that it entered into an accelerated share repurchase agreement (the "ASR") with Barclays Bank PLC (the "ASR counterparty") to repurchase $75 million of Alight's Class A Common Stock, as part of the Company's existing share repurchase program. On July 16, 2024, the Company made an initial payment of $75 million to the ASR counterparty and received an initial delivery of shares equal in value to 80% of the prepayment amount of $75 million, based on Alight’s closing share price as of the effective date of July 15, 2024. The final number of shares repurchased was based on the volume-weighted average price of Alight's common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR. The ASR was settled on September 23, 2024, resulting in an additional delivery of 2,400,041 shares of Alight's Class A Common Stock.
During the three months ended September 30, 2024, the Company repurchased 10,563,306 shares of Alight's Class A Common Stock in aggregate for $75 million as part of the ASR.
During the nine months ended September 30, 2024, there were 20,697,906 Class A Common Stock shares repurchased under the Program. Repurchased shares are reflected as Treasury Stock on the Condensed Consolidated Balance Sheets as a component of equity.

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The following table reflects the changes in our outstanding stock:
Class AClass B-1 Class B-2 Class V Class Z Treasury
Balance at June 30, 2024540,804,3884,914,9394,914,939554,568578,09716,562,453
Conversion of noncontrolling interest529,751——(529,751)——
Shares granted upon vesting1,653,54063,86863,868535,616(578,097)—
Issuance for compensation to non-employees(1)
19,980—————
Share repurchases(10,563,306)————10,563,306
Balance at September 30, 2024532,444,3534,978,8074,978,807560,433—27,125,759
Class AClass B-1 Class B-2 Class V Class Z Treasury
Balance at December 31, 2023507,567,6784,951,2354,951,23528,962,2183,420,2156,427,853
Conversion of noncontrolling interest28,937,401——(28,937,401)——
Shares granted upon vesting16,498,72063,86863,868535,616(3,420,215)—
Issuance for compensation to non-employees(1)138,460—————
Share repurchases(20,697,906)————20,697,906
Share forfeitures—(36,296)(36,296)———
Balance at September 30, 2024532,444,3534,978,8074,978,807560,433—27,125,759
_______________________________________________________
(1)Issued to certain members of the Board of Directors in lieu of cash retainer.

Dividends
There were no dividends declared during the three and nine months ended September 30, 2024.
Accumulated Other Comprehensive Income
As of September 30, 2024, the Accumulated other comprehensive income ("AOCI") balance included unrealized gains and losses for interest rate swaps and foreign currency translation adjustments related to our foreign subsidiaries that do not have the U.S. dollar as their functional currency. The tax effect on the Company's pre-tax AOCI items is recorded in the AOCI balance. This tax is comprised of two items: (1) the tax effects related to the unrealized pre-tax items recorded in AOCI and (2) the tax effect related to certain valuation allowances that have also been recorded in AOCI. When unrealized items in AOCI are recognized, the associated tax effects on these items will also be recognized in the tax provision.
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Changes in accumulated other comprehensive income, net of noncontrolling interests, are as follows (in millions):
Foreign
Currency
Translation
Adjustments (1)
Interest
Rate
Swaps (2)
Total
Balance at June 30, 2024$(8)$73 $65 
Other comprehensive income (loss) before reclassifications12 (23)(11)
Tax (expense) benefit1 10 11 
Other comprehensive income (loss) before reclassifications, net of tax13 (13)— 
Amounts reclassified from accumulated other comprehensive income— (17)(17)
Tax expense— — — 
Amounts reclassified from accumulated other comprehensive income, net of tax— (17)(17)
Net current period other comprehensive income (loss), net of tax13 (30)(17)
Balance at September 30, 2024$5 $43 $48 
Foreign
Currency
Translation
Adjustments (1)		Interest
Rate
Swaps (2)		Total
Balance at December 31, 2023$(3)$74 $71 
Other comprehensive income (loss) before reclassifications5 15 20 
Tax (expense) benefit3 12 15 
Other comprehensive income (loss) before reclassifications, net of tax8 27 35 
Amounts reclassified from accumulated other comprehensive income— (58)(58)
Tax expense— — — 
Amounts reclassified from accumulated other comprehensive income, net of tax— (58)(58)
Net current period other comprehensive income (loss), net of tax8 (31)(23)
Balance at September 30, 2024$5 $43 $48 
(1)Foreign currency translation adjustments include $1 million loss related to intercompany loans that have been designated long-term investment nature.
(2)Reclassifications from this category are recorded in Interest expense. See Note 13 “Derivative Financial Instruments” for additional information.
10. Share-Based Compensation
The Company has an active equity incentive plan, the Alight, Inc. 2021 Omnibus Incentive Plan (the "Incentive Plan"), under which the Company has been authorized to grant share-based awards to key employees and non-employee directors, which consist of restricted stock units ("RSUs") and performance share units ("PRSUs"). Under this plan, for grants issued during the nine months ended September 30, 2024, approximately 44% of the units are subject to time-based vesting requirements and approximately 56% are subject to performance-based vesting requirements. As of September 30, 2024, there were 84,080,443 remaining shares of common stock authorized for issuance pursuant to the Company’s stock-based compensation plans under its 2021 Omnibus Incentive Plan.
Restricted Share Units and Performance Based Restricted Share Units
RSUs are valued at the market price of a share of the Company’s common stock on the date of grant. In general, these awards vest ratably over a three-year period from the date of grant. All awards are expensed on a straight-line basis over a three-year period, which is considered to be the requisite service period.
The Company’s PRSUs contain various performance and service conditions that must be satisfied for an employee to earn the right to benefit from the award. The PRSUs vest upon achievement of various performance metrics aligned to goals established by the Company. Expense is recognized on a straight-line basis over the requisite service period, based on the probability of achieving the performance conditions, with changes in expectations recognized as an adjustment to
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earnings in the period of the change. Compensation cost is not recognized for performance share units that do not vest because service or performance conditions are not satisfied, and any previously recognized compensation cost is reversed.
The weighted-average grant-date fair value per share of RSUs and PRSUs granted during the nine months ended September 30, 2024 was approximately $8.83 and $8.97, respectively.
The following table summarizes the RSU and PRSU activity during the nine months ended September 30, 2024:
RSUs Weighted
Average
Grant Date
Fair Value
Per Unit
PRSUs(1)
Weighted
Average
Grant Date
Fair Value
Per Unit
Balance as of December 31, 20238,174,812$9.78 28,041,674$11.25 
Granted5,100,2678.83 5,944,6308.97 
Vested(3,049,313)8.94 (20,698,619)12.16 
Forfeited(2,867,256)8.94 (3,087,955)8.92 
Balance as of September 30, 20247,358,510$8.74 10,199,730$8.84 
_______________________________________________________
(1)The number of PRSUs presented are based on actual or expected achievement of the respective performance goals as of the end of the period.
The Company also forfeited approximately 3.5 million shares in July 2024 in conjunction with the Transaction as discussed in Note 1 "Basis of Presentation and Nature of Business".
Share-based Compensation Expense
Total share-based compensation expense related to the RSUs and PRSUs are recorded in the Condensed Consolidated Statements of Comprehensive Income (Loss) as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Cost of services, exclusive of depreciation and amortization$3 $7 $11 $21 
Selling, general and administrative8 22 48 72 
Total share-based compensation expense$11 $29 $59 $93 
As of September 30, 2024, total future compensation expense related to unvested RSUs was $47 million, which will be recognized over a remaining weighted-average amortization period of approximately 1.86 years. As of September 30, 2024, total future compensation expense related to PRSUs was $49 million, which will be recognized over a remaining weighted-average amortization period of approximately 1.56 years.
Employee Stock Purchase Plan
In December 2022, the Company began offering its employees an Employee Stock Purchase Plan (the “ESPP”). Under the ESPP, all full-time and certain part-time employees of the Company based in the U.S. and certain other countries are eligible to purchase Class A Common Stock of the Company twice per year at the end of a six-month payment period (a “Payment Period”). During each Payment Period, eligible employees who so elect may authorize payroll deductions in an amount no less than 1% nor greater than 10% of his or her base pay for each payroll period in the Payment Period. At the end of each Payment Period, the accumulated deductions are used to purchase shares of Class A Common Stock from the Company up to a maximum of 1,250 shares for any one employee during a Payment Period. Shares are purchased at a price equal to 85% of the fair market value of the Company’s Class A Common Stock on the last business day of a Payment Period. As of September 30, 2024, there were 12,692,122 remaining shares available for grant and 2,268,910 shares issued under the ESPP. The amount of share-based compensation expense related to the ESPP was approximately $0.3 million and $1.2 million for the three and nine months ended September 30, 2024, respectively.
11. Earnings Per Share
Basic earnings per share is calculated by dividing the net income (loss) attributable to Alight, Inc. by the weighted average number of shares of Class A Common Stock issued and outstanding. The computation of diluted earnings per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue shares were exercised or
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converted into shares or resulted in the issuance of shares that would then share in the net income of Alight, Inc. The Company’s Class V Common Stock does not, and its Class Z Common Stock did not, participate in the earnings or losses of the Company and are therefore not participating securities and have not been included in either the basic or diluted earnings per share calculations.
Basic and diluted (net loss) earnings per share are as follows (in millions, except for share and per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Basic and diluted (net loss) earnings per share:
Numerator
Net Income (Loss) From Continuing Operations$(44)$(40)$(169)$(196)
Less: Net income (loss) attributable to noncontrolling interest— (2)2 9 
Net Income (loss) from continuing operations attributable to Alight, Inc.$(44)$(42)$(167)$(187)
Net Income (Loss) From Discontinued Operations, Net of Tax(30)(6)2 4 
Net Income (Loss) Attributable to Alight, Inc. - basic$(74)$(48)$(165)$(183)
Loss impact of conversion of noncontrolling interest— — (1)— 
Net income (loss) attributable to Alight, Inc. - diluted$(74)$(48)$(166)$(183)
Denominator
Weighted-average shares outstanding - basic535,828,896493,226,324545,659,335486,683,943
Dilutive effect of the exchange of noncontrolling interest units——560,433—
Dilutive effect of RSUs————
Weighted-average shares outstanding - diluted535,828,896493,226,324546,219,768486,683,943
Basic and Diluted (net loss) earnings per share
Continuing operations$(0.08)$(0.09)$(0.31)$(0.39)
Discontinued operations$(0.06)$(0.01)$— $0.01 
Net Income (Loss)$(0.14)$(0.10)$(0.31)$(0.38)
For the three and nine months ended September 30, 2023, 36,565,810 units of Alight Holdings Class A units related to noncontrolling interests were not included in the computation of diluted shares outstanding as their impact would have been anti-dilutive.
For both the three and nine months ended September 30, 2024, 7,358,510 of unvested RSUs were not included in the computation of diluted shares outstanding as their impact would have been anti-dilutive. For both the three and nine months ended September 30, 2023, 9,161,197 of unvested RSUs were not included in the computation of diluted shares outstanding as their impact would have been anti-dilutive.
For the three and nine months ended September 30, 2024 and 2023, 10,199,730 and 28,547,275 unvested PRSUs, respectively, were excluded from the calculation of basic and diluted earnings per share. For both the three and nine months ended September 30, 2024 and 2023, these unvested PSU shares reflect current expected achievement levels and were excluded as the performance conditions were not met as of the end of the respective periods.
In conjunction with the Business Combination, the Company issued Seller Earnouts contingent consideration, which is payable in the Company’s Common Stock if the related market conditions are achieved. As the related conditions to pay the consideration had not been satisfied as of September 30, 2024, 14,999,998 shares related to the Seller Earnouts were excluded from the diluted earnings per share calculations.
12. Segment Reporting
As disclosed above in Note 1 “Basis of Presentation and Nature of Business”, on July 12, 2024, the Company closed on its previously announced sale of the Divested Business. As a result of the Transaction, the Company has
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determined it has one reportable segment, Employer Solutions. See Notes 1 “Basis of Presentation and Nature of Business” and Note 4 “Discontinued Operations” for additional information.
The Company’s reportable segments have been determined using a management approach, which is consistent with the basis and manner in which the Company’s chief operating decision maker (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance. The Company’s Chief Executive Officer is its CODM. The CODM evaluates the performance of the Company based on its total revenue and segment profit.
The CODM also uses revenue and segment gross profit to manage and evaluate our business, make planning decisions, and as performance measures for Company-wide bonus plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business. The Company does not report assets by reportable segments as this information is not reviewed by the CODM on a regular basis.
Information regarding the Company’s reportable segment revenue is as follows (in millions):
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Employer Solutions
Recurring$504 $497 $1,518 $1,535 
Project51 53 134 143 
Total Employer Solutions555 550 1,652 1,678 
Other— 7 — 26 
Total revenue$555 $557 $1,652 $1,704 
There was no single client who accounted for more than 10% of the Company’s revenues in any of the periods presented.
Segment Profit
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Employer Solutions$174 $166 $523 $542 
Other— — — (2)
Total Gross Profit174 166 523 540 
Selling, general and administrative142 136 434 436 
Depreciation and intangible amortization74 75 223 225 
Operating Income (Loss) From Continuing Operations(42)(45)(134)(121)
(Gain) Loss from change in fair value of financial instruments(23)(36)(54)(11)
(Gain) Loss from change in fair value of tax receivable agreement27 11 51 30 
Interest expense19 34 83 100 
Other (income) expense, net(12)— (11)1 
Income (Loss) From Continuing Operations Before Taxes$(53)$(54)$(203)$(241)
13. Derivative Financial Instruments
The Company is exposed to market risks, including changes in interest rates. To manage the risk related to these exposures, the Company has entered into various derivative instruments that reduce these risks by creating offsetting exposures.
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Interest Rate Swaps
The Company has utilized swap agreements that will fix the floating interest rates associated with its Term Loan as shown in the following table:
Designation DateEffective DateInitial Notional AmountNotional Amount Outstanding as of
September 30, 2024		Fixed RateExpiration Date
December 2021April 2024$871,205,040 $866,497,279 1.6533 %June 2025
December 2021April 2024$435,602,520 $433,248,640 1.6560 %June 2025
December 2021April 2024$435,602,520 $433,248,640 1.6650 %June 2025
March 2022June 2025$1,197,000,000 $1,197,000,000 2.5540 %December 2026
March 2023March 2023$150,000,000 $150,000,000 3.9025 %December 2026
March 2023March 2023$150,000,000 $150,000,000 3.9100 %December 2026
Concurrent with the refinancing of certain term loans, we amended our interest rate swaps to incorporate Term SOFR. In accordance with Accounting Standards Codification Topic 848, Reference Rate Reform, we did not redesignate the interest rate hedges when they were amended from LIBOR to SOFR as we are permitted to maintain the designation through the transition. During the nine months ended September 30, 2024, we have not executed any new interest rate swaps. Our interest rate swaps have been designated as cash flow hedges.
Certain swap agreements amortize or accrete based on achieving targeted hedge ratios. All interest rate swaps have been designated as cash flow hedges. The Company currently has two instruments that the fair value of the instruments at the time of re-designation are being amortized into interest expense over the remaining life of the instruments.
Financial Instrument Presentation
The fair values and location of outstanding derivative instruments recorded in the Condensed Consolidated Balance Sheets are as follows (in millions):
September 30,
2024		December 31,
2023
Assets
Other current assets$26 $60 
Other assets4 17 
Total$30 $77 
Liabilities
Other current liabilities$— $— 
Other liabilities3 3 
Total$3 $3 
The Company estimates that approximately $25 million of derivative gains included in Accumulated other comprehensive income as of September 30, 2024 will be reclassified into earnings over the next twelve months.
14. Financial Instruments
Seller Earnouts
Upon completion of the Business Combination, the equity owners of Alight Holdings received an earnout in the form of non-voting shares of Class B-1 and Class B-2 Common Stock, which automatically convert into Class A Common Stock if, at any time during the seven years following the Closing Date, certain criteria are achieved. See Note 9 “Stockholders’ Equity” for additional information regarding the Seller Earnouts.
The portion of the Seller Earnouts related to employee compensation was accounted for as share-based compensation. As all employee compensation associated with the Seller Earnouts was ultimately vested on July 2, 2024, no portion of the Seller Earnout as of September 30, 2024 is accounted for as share-based compensation. See Note 10 “Share-Based Compensation Expense” for additional information.
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As of September 30, 2024, all of the remaining Seller Earnouts were accounted for as a contingent consideration liability at fair value within Financial instruments on the Condensed Consolidated Balance Sheets because the Seller Earnouts do not meet the criteria for classification within equity. This liability is subject to remeasurement at each balance sheet date. At September 30, 2024 and December 31, 2023, the Seller Earnouts had a fair value of $62 million and $95 million, respectively. For the three months ended September 30, 2024, and September 30, 2023, the fair value remeasurement of the Seller Earnouts was a gain of $3 million and $37 million, respectively. For the nine months ended September 30, 2024 and 2023, the fair value remeasurement of the Seller Earnouts was a gain of $32 million and $24 million, respectively. Gains or losses related to the remeasurement of Seller Earnouts are recorded in (Gain) Loss from change in fair value of financial instruments within the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
The fair value of the Class B-1 and B-2 Seller Earnouts, and, prior to the Class Z vesting on July 2, 2024, the Class Z-B-1 and Z-B-2 contingent consideration instruments, is determined using Monte Carlo simulation and Option Pricing Methods (Level 3 inputs, see Note 16 "Fair Value Measurements"). Significant unobservable inputs are used in the assessment of fair value, including the following assumptions: volatility of 45%, risk-free interest rate of 3.58%, expected holding period of 3.76 years and probability assessments based on the likelihood of reaching the performance targets defined in the Business Combination. An increase in the risk-free interest rate or expected volatility would result in an increase in the fair value measurement of the Seller Earnouts and vice versa.
As discussed in Note 9 “Stockholders’ Equity”, in connection with the ultimate forfeiture of the shares of unvested Class A, unvested Class B-1, and unvested Class B-2 common stock issued to participating management holders on July 2, 2024, all Class Z instruments were ultimately settled resulting in the re-allocation of the forfeited compensatory Class A, Class B-1 and Class B2 instruments. The Class Z instruments are also accounted for as a contingent consideration liability at fair value within Financial instruments on the Condensed Consolidated Balance Sheets because these instruments do not meet the criteria for classification within equity. The fair value of the Class Z-A contingent consideration was determined using the ending share price as of the last day of each quarter until settlement on July 2, 2024, resulting in the issuance of 1.5 million shares of Class A common stock and units at the $7.09 stock price on that date.
At September 30, 2024, the Class Z-A contingent consideration was no longer outstanding. As of December 31, 2023, the Class Z-A contingent consideration had a fair value of $13 million. For the three months ended September 30, 2024, the expense recorded by the Company as a result of the forfeiture of unvested management equity relating to the consideration that will be re-allocated to the holders of Class Z instruments upon vesting was not material. For the three months ended September 30, 2023, the expense recorded by the Company as a result of the forfeiture of unvested management equity relating to the consideration that will be re-allocated to the holders of Class Z instruments upon vesting was a loss of $1 million. For the nine months ended September 30, 2024 and 2023, the Company recorded a gain of $2 million and a loss of $13 million, respectively, in (Gain) Loss from change in fair value of financial instruments in the Condensed Consolidated Statements of Comprehensive Income (Loss) as a result of the forfeiture of unvested management equity that was ultimately re-allocated to the holders of Class Z instruments on July 2, 2024. See Note 9 “Stockholders’ Equity” for additional information regarding these instruments.
Additional Seller Note
As disclosed above in Note 1 “Basis of Presentation and Nature of Business”, on July 12, 2024, the Company closed on its previously announced sale of Strada. As part of the sale, the Company received a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) with an initial fair value of $52 million as of July 12, 2024 to be issued by the Note Issuer. See Note 4 “Discontinued Operations” for additional information. The Additional Seller Note is considered a level 3 recurring fair value measurement. At September 30, 2024, the Additional Seller Note had a fair value of $72 million. For each of the three and nine months ended September 30, 2024, the Company recorded a gain of $20 million from the fair value remeasurement of the Additional Seller Note. Gains or losses related to the recurring fair value remeasurement of the Additional Seller Note are recorded in (Gain) Loss from change in fair value of financial instruments within the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).
The fair value of the Additional Seller Note is determined using a variation of the income approach (Level 3 inputs, see Note 16 "Fair Value Measurements"). Significant unobservable inputs are used in the assessment of fair value, including the following assumptions: expected Adjusted EBITDA, expected maturity of the Additional Seller Note, and Strada's estimated cost of debt, based on the likelihood of reaching the performance targets defined in the Purchase Agreement.
15. Tax Receivable Agreement
In connection with the Business Combination, Alight entered into the TRA with certain owners of Alight Holdings prior to the Business Combination. Pursuant to the TRA, the Company will pay certain sellers, as applicable, 85% of any savings that we realize, calculated using certain assumptions, as a result of (i) tax basis adjustments from sales and exchanges of Alight Holdings equity interests in connection with or following the Business Combination and certain
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distributions with respect to Alight Holdings equity interests, (ii) our utilization of certain tax attributes, and (iii) certain other tax benefits related to entering into the TRA.
Actual tax benefits realized by Alight may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, we expect that the payments that Alight may make under the TRA will be substantial.
The Company’s TRA liability established upon completion of the Business Combination is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The TRA liability balance at September 30, 2024 assumes: (i) a blended U.S. federal, state and local income tax rate of 23.8%; (ii) no material changes in tax law; (iii) the ability to utilize tax attributes based on current tax forecasts; and (iv) future payments under the TRA are made when due under the TRA. The amount of the expected future payments under the TRA has been discounted to its present value using a discount rate of 7.3%.
Subsequent to the Business Combination, we record additional liabilities under the TRA as and when Class A units of Alight Holdings are exchanged for Class A Common Stock. Liabilities resulting from these exchanges will be recorded on a gross undiscounted basis and are not remeasured at fair value. During the nine months ended September 30, 2024, an additional TRA liability of $90 million was established as a result of these exchanges. As of September 30, 2024, $635 million of the TRA liability was measured at fair value on a recurring basis and $239 million was undiscounted and not remeasured at fair value.
The following table summarizes the changes in the TRA liabilities (in millions):
Tax Receivable
Agreement Liability
Beginning balance as of December 31, 2023$795 
Fair value remeasurement51 
Payments(62)
Conversion of noncontrolling interest90 
Ending Balance as of September 30, 2024874 
Less: current portion included in other current liabilities(119)
Total long-term tax receivable agreement liability$755 
16. Fair Value Measurement
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The accounting standards related to fair value measurements include a hierarchy for information and valuations used in measuring fair value that is broken down into three levels based on reliability, as follows:
•Level 1 – observable inputs such as quoted prices in active markets for identical assets and liabilities;
•Level 2 – inputs other than quoted prices for identical assets in active markets that are observable either directly or indirectly; and
•Level 3 – unobservable inputs in which there is little or no market data which requires the use of valuation techniques and the development of assumptions.
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The Company’s financial assets and liabilities measured at fair value on a recurring basis are as follows (in millions):
September 30, 2024
Level 1Level 2Level 3Total
Assets
Interest rate swaps$— $30 $— $30 
Additional Seller Note— — 72 72 
Total assets recorded at fair value$— $30 $72 $102 
Liabilities
Interest rate swaps$— $3 $— $3 
Contingent consideration liability— — 6 6 
Seller Earnouts liability— — 62 62 
Tax receivable agreement liability (1)
— — 635 635 
Total liabilities recorded at fair value$— $3 $703 $706 
December 31, 2023
Level 1Level 2Level 3Total
Assets
Interest rate swaps$— $77 $— $77 
Total assets recorded at fair value$— $77 $— $77 
Liabilities
Interest rate swaps— 3 — 3 
Contingent consideration liability— — 3 3 
Seller Earnouts liability— — 95 95 
Tax receivable agreement liability (1)
— — 634 634 
Total liabilities recorded at fair value$— $3 $732 $735 
_________________________________________________________
(1)Excludes the portion of liability related to the exchanges of Class A Units not measured at fair value on a recurring basis.
Derivatives
The valuations of the derivatives intended to mitigate our interest rate risk are determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each instrument. This analysis utilizes observable market-based inputs, including interest rate curves, interest rate volatility, or spot and forward exchange rates, and reflects the contractual terms of these instruments, including the period to maturity. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential non-performance risk.
Contingent Consideration
The contingent consideration liabilities relate to acquisitions in previous years and are included in Other current liabilities on the Condensed Consolidated Balance Sheets. The fair value of these liabilities is determined using a discounted cash flow analysis. Changes in the fair value of the liabilities are included in Other (income) expense, net in the Condensed Consolidated Statements of Comprehensive Income (Loss). Level 3 unobservable inputs are used in the assessment of fair value, including assumptions regarding discount rates and probability assessments based on the likelihood of reaching the various targets set out in the respective acquisition agreements.
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The following table summarizes the changes in deferred contingent consideration liabilities (in millions):
Three Months Ended
September 30		Nine Months Ended
September 30
2024202320242023
Beginning balance$3 $13 $3 $13 
Measurement period adjustments3 — 3 — 
Remeasurement of acquisition-related contingent consideration— — — — 
Payments— — — — 
Ending Balance$6 $13 $6 $13 
Additional Disclosures Regarding Fair Value Measurement
The fair value of the Company’s debt is classified as Level 2 within the fair value hierarchy and corroborated by observable market data is as follows (in millions):
September 30, 2024December 31, 2023
Carrying ValueFair ValueCarrying ValueFair Value
Liabilities
Current portion of long-term debt, net$25 $29 $25 $25 
Long-term debt, net2,006 2,008 2,769 2,780 
Total$2,031 $2,037 $2,794 $2,805 
The carrying value of the Term Loan, Secured Senior Notes include the outstanding principal balance, less any unamortized premium. The carrying value of the Term Loan approximates fair value as it bears interest at variable rates and we believe our credit risk is consistent with when the debt originated. The outstanding balances under the Senior Notes have fixed interest rates and the fair value is classified as Level 2 within the fair value hierarchy and corroborated by observable market data (see Note 8 “Debt”).
The carrying amounts of Cash and cash equivalents, Receivables, net and Accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments.
During each of the nine months ended September 30, 2024 and 2023, there were no transfers in or out of the Level 1, Level 2 or Level 3 classifications.
17. Restructuring
Transformation Program
On February 20, 2023, the Company approved a two-year strategic transformation restructuring program (the “Transformation Program”) intended to accelerate the Company’s back-office infrastructure into the cloud and transform its operating model leveraging technology in order to reduce its overall future costs. The Transformation Program includes process and system optimization, third party costs associated with technology infrastructure transformation, and elimination of full-time positions. The Company currently expects to record in the aggregate approximately $139 million in pre-tax restructuring charges over the two-year period. The restructuring charges are expected to include severance charges with an estimated range from $42 million to $45 million over the two-year period and other restructuring charges related to items such as data center exit costs, third party fees, and costs associated with transitioning existing technology and processes with an estimated range of $91 million to $97 million over the two-year period. The Company estimates an annual savings of over $75 million after the Transformation Program is completed. The Transformation Program commenced in the first quarter of 2023 and is expected to be substantially completed over an estimated two-year period.
From the inception of the plan through September 30, 2024, the Company has incurred total expenses of $133 million. These charges are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss). The following table summarizes restructuring costs by type that have been incurred.
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Three Months Ended September 30, 2024Three Months Ended September 30, 2023Nine Months Ended September 30, 2024Nine Months Ended September 30, 2023Inception to
Date		Estimated
Remaining
Costs		Estimated
Total
Cost
Employer Solutions
Severance and Related Benefits$1 $2 $3 $5 $10 $— $10 
Other Restructuring Costs(1)
3 9 24 41 86 1 87 
Total Employer Solutions$4 $11 $27 $46 $96 $1 $97 
Corporate
Severance and Related Benefits$7 $3 $15 $15 $32 $— $32 
Other Restructuring Costs(1)
1 1 3 2 5 5 10 
Total Corporate$8 $4 $18 $17 $37 $5 $42 
Total Restructuring Costs$12 $15 $45 $63 $133 $6 $139 
(1)Other restructuring costs associated with the Transformation Program primarily include data center exit costs, third party fees associated with the restructuring, and costs associated with transitioning existing technology and processes.
As of September 30, 2024, approximately $15 million of the Company's total restructuring liability is unpaid and is recorded in Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets.
Severance and
Related Benefits 		Other Restructuring
Costs 		Total
Accrued restructuring liability as of December 31, 2023$6 $1 $7 
Restructuring charges18 27 45 
Cash payments(9)(28)(37)
Accrued restructuring liability as of September 30, 2024$15 $— $15 
18. Employee Benefits
Defined Contribution Savings Plans
Certain of the Company’s employees participate in a defined contribution savings plan sponsored by the Company. For the three months ended September 30, 2024 and 2023, expenses were $10 million and $6 million, respectively. For the nine months ended September 30, 2024 and 2023, expenses were $26 million and $32 million, respectively. Expenses were recognized in Cost of services, exclusive of depreciation and amortization and Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss).
19. Commitments and Contingencies
Legal
The Company is subject to various claims, tax assessments, lawsuits, and proceedings that arise in the ordinary course of business relating to the delivery of our services and the effectiveness of our technologies. The damages claimed in these matters are or may be substantial. Accruals for any exposures, and related insurance or other receivables, when applicable, are included on the Condensed Consolidated Balance Sheets and have been recognized in Selling, general and administrative expenses in the Condensed Consolidated Statements of Comprehensive Income (Loss) to the extent that losses are deemed probable and are reasonably estimable. These amounts are adjusted from time to time as developments warrant. Management believes that the reserves established are appropriate based on the facts currently known. Management believes that the reserves established are appropriate based on the facts currently known. The reserves recorded at September 30, 2024 and December 31, 2023 were not significant.
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Guarantees and Indemnifications
The Company provides a variety of service performance guarantees and indemnifications to its clients. The maximum potential amount of future payments represents the notional amounts that could become payable under the guarantees and indemnifications if there were a total default by the guaranteed parties, without consideration of possible recoveries under recourse provisions or other methods. These notional amounts may bear no relationship to the future payments that may be made, if any, for these guarantees and indemnifications.
To date, the Company has not been required to make any payment under any client arrangement as described above. The Company has assessed the current status of performance risk related to the client arrangements with performance guarantees and believes that any potential payments would be immaterial to the Condensed Consolidated Financial Statements.
Purchase Obligations
In March 2024, the Company entered into an agreement with a third-party provider in the ordinary course of business for the use of certain cloud services. Under this agreement, the Company is committed to purchase services totaling $250 million over a 5-year term. The Company’s total expected cash outflow for non-cancellable purchase obligations related to purchases of information technology assets and services, including the new agreement, is $16 million, $59 million, $54 million, $54 million, $50 million, and $13 million for the remainder of 2024 and the years ended 2025, 2026, 2027, 2028, and thereafter, respectively.
Service Obligations
On September 1, 2018, the Company executed an agreement to form a strategic partnership with Wipro, a leading global information technology, consulting and business process services company. The Company’s expected cash outflow for non-cancellable service obligations related to our strategic partnership with Wipro is $40 million, $162 million, $170 million, $178 million, $154 million for the remainder of 2024 and the years ended 2025, 2026, 2027, 2028, respectively, and none thereafter.
The Company may terminate its arrangement with Wipro for cause or for the Company’s convenience. In the case of a termination for convenience, the Company would be required to pay a termination fee, including certain of Wipro’s unamortized costs, plus 25% of any remaining portion of the minimum level of services the Company agreed to purchase from Wipro over the course of 10 years.
20. Subsequent Events

The Company announced on November 12, 2024 that its Board of Directors approved a new quarterly dividend program. The Board of Directors declared a quarterly cash dividend of $0.04 per share of Class A common stock to be paid on December 16, 2024, to stockholders of record as of December 2, 2024. The Company intends to continue paying regular cash dividends on a quarterly basis. Any decision to declare and pay dividends in the future will be made at the sole discretion of our Board of Directors, whose decision will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes which are included elsewhere in this Quarterly Report on Form 10-Q and with the Annual Report. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from those discussed in "Item 1A. Risk Factors" in our Annual Report and in this Quarterly Report on Form 10-Q, particularly under the caption "Forward-Looking Statements."
BUSINESS
Overview
Alight delivers human capital management solutions to many of the world’s largest and most complex companies. This includes the implementation and administration of employee wellbeing (e.g. health, wealth and leaves benefits). In addition, the Company implements and runs human capital management software platforms on behalf of third-party providers. Alight’s numerous solutions and services are utilized year-round by employees and their family members in support of their overall health, wealth and wellbeing goals. Participants can access their solutions digitally, including through a mobile application on Alight Worklife®, our intuitive, cloud-based employee engagement platform. Through Alight Worklife, the Company believes it is defining the future of employee wellbeing by providing an enterprise level, integrated offering designed to drive better outcomes for organizations and individuals.
We aim to be the pre-eminent employee experience partner by providing personalized experiences that help employees make the best decisions for themselves and their families about their health, wealth and wellbeing. At the same time, we help employers tackle their biggest people and business challenges by helping them understand prevalence, trends and risks to generate better outcomes for the future, such as improved employee productivity and retention, while also realizing a return on their people investment. Our data, analytics and AI allow us to deliver actionable insights that drive measurable outcomes, such as healthcare claims savings, for companies and their people. We provide solutions to manage health and retirement benefits, tools for HR management, as well as solutions to manage the workforce from the cloud.
On July 2, 2021 (the “Closing Date”), Alight Holding Company, LLC (the "Predecessor" or "Alight Holdings") completed a business combination (the "Business Combination") with a special purpose acquisition company. On the Closing Date, pursuant to the Business Combination Agreement, the special purpose acquisition company became a wholly owned subsidiary of Alight, Inc. (“Alight”, the “Company”, “we” “us” “our” or the “Successor”). As of September 30, 2024, Alight owned approximately 99% of the economic interest in the Predecessor, had 100% of the voting power and controlled the management of the Predecessor. The non-voting ownership percentage held by noncontrolling interest was less than 1% as of September 30, 2024.
On July 12, 2024, Alight, Inc. and Tempo Acquisition LLC, a subsidiary of the Company, completed the previously announced sale (the “Transaction”) of Alight’s Professional Services segment and Alight’s Payroll & HCM Outsourcing business within the Employer Solutions segment (collectively, the “Divested Business” or “Strada”) to Axiom Buyer, LLC, a newly-formed entity and an affiliate of H.I.G. Capital, L.L.C. (“Buyer”), pursuant to the terms of the Stock and Asset Purchase Agreement (the “Purchase Agreement”), dated as of March 20, 2024. The Company has incurred, and expects to continue to incur, higher operating expenses in 2024 as a result of professional fees incurred in conjunction with the transaction.

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EXECUTIVE SUMMARY OF FINANCIAL RESULTS
The following table sets forth our historical results of operations for the periods indicated below:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2024202320242023
Revenue$555 $557 $1,652 $1,704 
Cost of services, exclusive of depreciation and amortization358 372 1,059 1,110 
Depreciation and amortization23 19 70 54 
Gross Profit174 166 523 540 
Operating Expenses
Selling, general and administrative142 136 434 436 
Depreciation and intangible amortization74 75 223 225 
Total Operating expenses216 211 657 661 
Operating Income (Loss) From Continuing Operations(42)(45)(134)(121)
Other (Income) Expense
(Gain) Loss from change in fair value of financial instruments(23)(36)(54)(11)
(Gain) Loss from change in fair value of tax receivable agreement27 11 51 30 
Interest expense19 34 83 100 
Other (income) expense, net(12)— (11)1 
Total Other (income) expense, net11 9 69 120 
Income (Loss) From Continuing Operations Before Taxes(53)(54)(203)(241)
Income tax expense (benefit)(9)(14)(34)(45)
Net Income (Loss) From Continuing Operations(44)(40)(169)(196)
Net Income (Loss) From Discontinued Operations (including gain on disposal of $4.0m), Net of Tax(30)(6)2 4 
Net Income (Loss)(74)(46)(167)(192)
Net income (loss) attributable to noncontrolling interests— 2 (2)(9)
Net Income (Loss) Attributable to Alight, Inc.$(74)$(48)$(165)$(183)
REVIEW OF RESULTS
Key Components of Our Continuing Operations
Revenue
Our clients’ demand for our services ultimately drives our revenues. We generate primarily all of our revenue, which is highly recurring, from fees for services provided from contracts across all solutions, which is primarily based on a contracted fee charged per participant per period (e.g., monthly or annually, as applicable). Our contracts typically have three to five-year terms for ongoing services with mutual renewal options. The majority of the Company’s revenue is recognized over time when control of the promised services is transferred, and the customers simultaneously receive and consume the benefits of our services. Payment terms are consistent with industry practice. We calculate growth rates for each of our solutions in relation to recurring revenues and revenues from project work. One of the components of our growth in recurring revenues is the increase in net commercial activity which reflects items such as client wins and losses (“Net Commercial Activity”). We define client wins as sales to new clients and sales of new solutions to existing clients. We define client losses as instances where clients do not renew or terminate their arrangements in relation to individual solutions or all of the solutions that we provide. We measure revenue growth as it relates to the cloud-based products and solutions that are central to our Alight Worklife® platform and next generation product suite, BPaaS Solutions.
Cost of Services, exclusive of Depreciation and Amortization
Cost of services, exclusive of depreciation and amortization includes compensation-related and vendor costs directly attributable to client-related services and costs related to application development and client-related infrastructure.
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Depreciation and Amortization
Depreciation and amortization expenses include the depreciation and amortization related to our hardware, software and application development. Depreciation and amortization may increase or decrease in absolute dollars in future periods depending on the future level of capital investments in hardware, software and application development.
Selling, General and Administrative
Selling, general and administrative expenses include compensation-related costs for administrative and management employees, system and facilities expenses, and costs for external professional and consulting services.
Depreciation and Intangible Amortization
Depreciation and intangible amortization expenses consist of charges relating to the depreciation of the property and equipment used in our business and the amortization of acquired customer-related and contract based intangible assets and technology related intangible assets. Depreciation and intangible amortization may increase or decrease in absolute dollars in future periods depending on the future level of capital investments in hardware and other equipment as well as amortization expense associated with future acquisitions.
(Gain) Loss from Change in Fair Value of Financial Instruments
(Gain) loss from change in fair value of financial instruments includes the impact of the revaluation to fair value at the end of each reporting period for the Seller Earnouts contingent consideration and Additional Seller Note.
(Gain) Loss from Change in Fair Value of Tax Receivable Agreement
(Gain) loss from change in fair value of Tax Receivable Agreement ("TRA") includes the impact of the revaluation to fair value at the end of each reporting period.
Interest Expense
Interest expense primarily includes interest expense related to our outstanding debt.
Other (Income) Expense, net
Other (income) expense, net includes non-operating expenses and income, including realized (gains) and losses from remeasurement of foreign currency transactions.
Results of Continuing Operations for the Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023
Revenue
Revenues were $555 million for the three months ended September 30, 2024 as compared to $557 million for the prior year period. The decrease of $2 million or 0.4% was driven by lower volumes and project revenue within our Employer Solutions segment and the wind-down of our Hosted business operations, partially offset by higher Net Commercial Activity. We also measure revenue growth as it relates to our cloud-based products and solutions that are central to our Alight Worklife® platform and our next generation product suite, BPaaS Solutions. For the three months ended September 30, 2024, we recorded BPaaS revenue of $121 million, which represented growth of 18.6% compared to the prior year period.
Recurring revenues of $504 million for the three months ended September 30, 2024 were consistent with the prior year period.
Cost of Services, exclusive of Depreciation and Amortization
Cost of services, exclusive of depreciation and amortization, decreased $14 million, or 3.8%, for the three months ended September 30, 2024 as compared to the prior year period. The decrease was primarily driven by lower share-based compensation and the benefit from productivity initiatives.
Selling, General and Administrative
Selling, general and administrative expenses increased $6 million, or 4.4%, for the three months ended September 30, 2024 as compared to the prior year period. This was driven by professional fees incurred related to the separation of our
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Payroll and Professional Services businesses, partially offset by lower compensation expenses primarily related to share-based awards and lower costs incurred from our restructuring program.
Depreciation and Intangible Amortization
Depreciation and intangible amortization expenses decreased $1 million, or 1.3%, for the three months ended September 30, 2024 as compared to the prior year period.
Change in Fair Value of Financial Instruments
There was a $23 million gain related to the change in the fair value of financial instruments for the three months ended September 30, 2024 compared to a $36 million gain for the prior year period. We are required to remeasure the financial instruments at the end of each reporting period and reflect a gain or loss for the change in fair value of the financial instruments in the period the change occurred. Changes in the fair value are primarily due to changes in the underlying assumptions of each respective instrument, including changes in the risk-free interest rate, volatility, cost of debt and the closing stock price for the period and are primarily related to the Seller Earnout and Additional Seller Note. See Note 14 "Financial Instruments" for additional information.
Change in Fair Value of Tax Receivable Agreement
The change in the fair value of the TRA resulted in a loss of $27 million for the three months ended September 30, 2024, an increase of $16 million compared to a loss of $11 million for the prior year period. This revaluation loss was due to changes in the Company's assumptions related to the timing of the utilization of tax attributes during the term of the TRA, changes in the discount rate, and passage of time.
Interest Expense
Interest expense decreased $15 million or 44.1% for the three months ended September 30, 2024 as compared to the prior year period, primarily driven by the partial repayment of debt. See Note 8 “Debt” for additional information.
Other (Income) Expense, net
Under the terms of the TSA described in Note 4 "Discontinued Operations", the Company is providing technology infrastructure, risk and security, and various other corporate services to Strada. We recorded $9 million for the three months ended September 30, 2024 in Other (income) expense, net, and the corresponding expense was recognized in Cost of services and Selling, general and administrative expense in the condensed consolidated statement of comprehensive income (loss).
Income (Loss) Before Taxes From Continuing Operations
Loss before taxes from continuing operations was $53 million for the three months ended September 30, 2024 as compared to loss before taxes from continuing operations of $54 million for the three months ended September 30, 2023. The decrease in loss was primarily attributable to lower interest expense as a result of the partial debt repayment and other income recorded in conjunction with the TSA, partially offset by the non-operating fair value remeasurements of financial instruments and the TRA.
Income Tax Expense (Benefit)
Income tax benefit was $9 million for the three months ended September 30, 2024, as compared to an income tax benefit of $14 million for the prior year period. The effective tax rate of 17% for the three months ended September 30, 2024 was lower than the 21% U.S. statutory corporate income tax rate primarily due to non-deductible portion of share-based compensation expense, the tax receivable agreement fair value adjustment, and the seller earnout liability fair value adjustment. The effective tax rate of 26% for the three months ended September 30, 2023 was higher than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible portion of share-based compensation expense, TRA fair value adjustment, and the seller earnout liability fair value adjustment. See Note 7 “Income Taxes” for additional information.
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Results of Continuing Operations for the Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Revenue
Revenues were $1,652 million for the nine months ended September 30, 2024 as compared to $1,704 million for the prior year period. The decrease of $52 million, or 3.1%, was driven by lower volumes, Net Commercial Activity and project revenue within our Employer Solutions segment and the wind-down of our Hosted business operations. We experienced short term impacts in the first half of 2024 when compared to the prior year period as a result of large deal go-live timing and softness in BPaaS bookings in the first half of 2023. We also measure revenue growth as it relates to our cloud-based products and solutions that are central to our Alight Worklife® platform and our next generation product suite, BPaaS Solutions. For the nine months ended September 30, 2024, we recorded BPaaS revenue of $353 million, which represented growth of 17.3% compared to the prior year period.
Recurring revenues decreased by $43 million, or 2.8%, from $1,561 million in the prior year period to $1,518 million and are related to decreases in our Employer Solutions segment, driven by lower volumes and Net Commercial Activity.
Cost of Services, exclusive of Depreciation and Amortization
Cost of services, exclusive of depreciation and amortization, decreased $51 million, or 4.6%, for the nine months ended September 30, 2024 as compared to the prior year period. The decrease was primarily driven by lower revenues, lower stock-based compensation and productivity initiatives.
Selling, General and Administrative
Selling, general and administrative expenses decreased $2 million, or 0.5%, for the nine months ended September 30, 2024 as compared to the prior year period. The decrease was driven by lower compensation expenses primarily related to share-based awards and lower costs incurred from our restructuring program, partially offset by professional fees related to the sale and separation of our Payroll and Professional Services businesses.
Depreciation and Intangible Amortization
Depreciation and intangible amortization expenses decreased by $2 million, or 0.9%, when comparing the nine months ended September 30, 2024 to the prior year period.
Change in Fair Value of Financial Instruments
There was a $54 million gain related to the change in the fair value of financial instruments for the nine months ended September 30, 2024 compared to a gain of $11 million for the prior year period. We are required to remeasure the financial instruments at the end of each reporting period and reflect a gain or loss for the change in fair value of the financial instruments in the period the change occurred. Changes in the fair value are primarily due to changes in the underlying assumptions of each respective instrument, including changes in the risk-free interest rate, volatility, cost of debt and the closing stock price for the period and are primarily related to the Seller Earnout and Additional Seller Note. See Note 14 "Financial Instruments" for additional information.
Change in Fair Value of Tax Receivable Agreement
The change in the fair value of the TRA resulted in a loss of $51 million for the nine months ended September 30, 2024, an increase of $21 million compared to a loss of $30 million for the prior year period. This revaluation loss was due to conversion of non-controlling interest during the nine months ended September 30, 2024, changes in the Company's assumptions related to the timing of the utilization of tax attributes during the term of the TRA, changes in the discount rate, and passage of time.
Interest Expense
Interest expense decreased $17 million for the nine months ended September 30, 2024 as compared to the prior year period. The decrease was primarily due to the partial repayment of debt and increased hedging activity at favorable market rates, the opportunistic repricing of our 2028 term loan and higher interest income. See Note 8 “Debt” for additional information.
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Other (Income) Expense, net
Under the terms of the TSA described in Note 4 "Discontinued Operations", the Company is providing technology infrastructure, risk and security, and various other corporate services to Strada. We recorded $9 million for the nine months ended September 30, 2024 in Other (income) expense, net, and the corresponding expense was recognized in Cost of services and Selling, general and administrative expense in the condensed consolidated statement of comprehensive income (loss).
Income (Loss) Before Taxes From Continuing Operations
Loss before taxes from continuing operations was $203 million for the nine months ended September 30, 2024 as compared to loss before taxes from continuing operations of $241 million for the nine months ended September 30, 2023. The decrease in loss was primarily attributable to lower interest expense as a result of the partial debt repayment and other income recorded in conjunction with the TSA, partially offset by the non-operating fair value remeasurements of financial instruments and the TRA.
Income Tax Expense (Benefit)
Income tax benefit was $34 million for the nine months ended September 30, 2024, as compared to an income tax benefit of $45 million for the prior year period. The effective tax rate of 17% for the nine months ended September 30, 2024 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible portion of share-based compensation expense, the tax receivable agreement fair value adjustment, and the seller earnout liability fair value adjustment. The effective tax rate of 19% for the nine months ended September 30, 2023 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible portion of share-based compensation expense, TRA fair value adjustment, and the seller earnout liability fair value adjustment. See Note 7 “Income Taxes” for additional information.
Non-GAAP Financial Measures
The presentation of non-GAAP financial measures is used to enhance our management and stakeholders understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. Management also uses supplemental non-GAAP financial measures to manage and evaluate the business, make planning decisions, allocate resources and as performance measures for Company-wide bonus plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business.
The measures referred to as “adjusted”, have limitations as analytical tools, and such measures should not be considered either in isolation or as a substitute for net income or other methods of analyzing our results as reported under U.S. GAAP. Some of the limitations are:
•Measure does not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;
•Measure does not reflect our interest expense or the cash requirements to service interest or principal payments on our indebtedness;
•Measure does not reflect our tax expense or the cash requirements to pay our taxes, including payments related to the Tax Receivable Agreement;
•Measure does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
•Although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often need to be replaced in the future, and the adjusted measure does not reflect any cash requirements for such replacements; and
•Other companies may calculate adjusted measures differently, limiting its usefulness as a comparative measure.
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Adjusted Net Income From Continuing Operations and Adjusted Diluted Earnings Per Share From Continuing Operations
Adjusted Net Income From Continuing Operations, which is defined as net income (loss) from continuing operations, adjusted for intangible amortization and the impact of certain non-cash items that we do not consider in the evaluation of ongoing operational performance, is a non-GAAP financial measure used solely for the purpose of calculating Adjusted Diluted Earnings Per Share From Continuing Operations.
Adjusted Diluted Earnings Per Share From Continuing Operations is defined as Adjusted Net Income From Continuing Operations divided by the adjusted weighted-average number of shares of common stock, diluted. The adjusted weighted shares calculation assumes the full exchange of the non-controlling interest units and the full amount of non-vested time-based restricted units that were determined to be antidilutive and therefore excluded from the U.S. GAAP diluted earnings per share. Adjusted Diluted Earnings Per Share From Continuing Operations, including the adjusted weighted-average number of shares, is used by us and our investors to evaluate our core operating performance and to benchmark our operating performance against our competitors.
A reconciliation of Adjusted Net Income (Loss) From Continuing Operations and the computation of Adjusted Diluted Earnings Per Share From Continuing Operations is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions, except share and per share amounts)2024202320242023
Numerator:
Net Income (Loss) From Continuing Operations Attributable to Alight, Inc. (1)
$(44)$(42)$(167)$(187)
Conversion of noncontrolling interest— 2 (2)(9)
Intangible amortization70 69 210 210 
Share-based compensation11 29 59 93 
Transaction and integration expenses (2)
21 6 57 16 
Restructuring12 15 45 63 
(Gain) Loss from change in fair value of financial instruments(23)(36)(54)(11)
(Gain) Loss from change in fair value of tax receivable agreement27 11 51 30 
Other6 1 8 2 
Tax effect of adjustments (3)
(32)(5)(73)(46)
Adjusted Net Income From Continuing Operations$48 $50 $134 $161 
Denominator:
Weighted average shares outstanding - basic535,828,896493,226,324545,659,335486,683,943
Dilutive effect of the exchange of noncontrolling interest units——560,433—
Dilutive effect of RSUs————
Weighted average shares outstanding - diluted535,828,896493,226,324546,219,768486,683,943
Exchange of noncontrolling interest units(4)
663,05740,858,0162,189,16947,618,819
Impact of unvested RSUs(5)
7,358,5109,161,1977,358,5109,161,197
Adjusted shares of Class A Common Stock outstanding - diluted(6)(7)
543,850,463543,245,537555,767,447543,463,959
Basic (Net Loss) Earnings Per Share From Continuing Operations$(0.08)$(0.09)$(0.31)$(0.39)
Diluted (Net Loss) Earnings Per Share From Continuing Operations$(0.08)$(0.09)$(0.31)$(0.39)
Adjusted Diluted Earnings Per Share From Continuing Operations$0.09 $0.09 $0.24 $0.30 
__________________________________________________________
39

(1)Excludes the impact of discontinued operations. Comparable periods have been recast to exclude these impacts.
(2)Transaction and integration expenses primarily relate to acquisitions and divestiture activities.
(3)Income tax effects have been calculated based on statutory tax rates for both U.S. and foreign jurisdictions based on the Company's mix of income and adjusted for significant changes in fair value measurement.
(4)Assumes the full exchange of the units held by noncontrolling interests for shares of Class A Common Stock of Alight, Inc. pursuant to the exchange agreement.
(5)Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S. GAAP diluted earnings per share purposes.
(6)Excludes two tranches of contingently issuable seller earnout shares: (i) 7.5 million shares will be issued if the Company's Class A Common Stock's volume-weighted average price ("VWAP") is >$12.50 for any 20 trading days within a consecutive period of 30 trading days; (ii) 7.5 million shares will be issued if the Company's Class A Common Stock VWAP is >$15.00 for any 20 trading days within a consecutive period of 30 trading days. Both tranches have a seven-year duration.
(7)Excludes approximately 10.2 million and 28.5 million performance-based units, which represents the gross number of shares expected to vest based on achievement of the respective performance conditions as of September 30, 2024 and 2023, respectively.
Adjusted EBITDA From Continuing Operations and Adjusted EBITDA Margin From Continuing Operations
Adjusted EBITDA From Continuing Operations is defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance. Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margin From Continuing Operations are non-GAAP financial measures used by management and our stakeholders to provide useful supplemental information that enables a better comparison of our performance across periods as well as to evaluate our core operating performance. A reconciliation of Adjusted EBITDA From Continuing Operations to Net Income (Loss) From Continuing Operations is as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2024202320242023
Net Income (Loss) From Continuing Operations (1)
$(44)$(40)$(169)$(196)
Interest expense19 34 83 100 
Income tax expense (benefit)(9)(14)(34)(45)
Depreciation27 25 83 69 
Intangible amortization70 69 210 210 
EBITDA From Continuing Operations63 74 173 138 
Share-based compensation11 29 59 93 
Transaction and integration expenses (2)
21 6 57 16 
Restructuring12 15 45 63 
(Gain) Loss from change in fair value of financial instruments(23)(36)(54)(11)
(Gain) Loss from change in fair value of tax receivable agreement27 11 51 30 
Other7 1 8 2 
Adjusted EBITDA From Continuing Operations$118 $100 $339 $331 
Revenue$555 $557 $1,652 $1,704 
Adjusted EBITDA Margin From Continuing Operations (3)
21.3 %18.0 %20.5 %19.4 %
(1)Adjusted EBITDA excludes the impact of discontinued operations. Comparable periods have been recast to exclude these impacts.
(2)Transaction and integration expenses primarily relate to acquisition and divestiture activities.
(3)Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations as a percentage of revenue.
Segment Revenue and Adjusted Gross Profit
Adjusted gross profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation. Adjusted gross profit margin percent is defined as adjusted gross profit divided by revenue. Management uses adjusted gross profit and adjusted gross profit margin percent as key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting adjusted gross profit and
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adjusted gross profit margin percent is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.
Employer Solutions Results
Three Months Ended September 30,Nine Months Ended September 30,
($ in millions)2024202320242023
Employer Solutions Revenue
Recurring$504 $497 $1,518 $1,535 
Project51 53 134 143 
Total Employer Solutions Revenue$555 $550 $1,652 $1,678 
Employer Solutions Gross Profit$174 $166 $523 $542 
Employer Solutions Gross Profit Margin31.4 %30.2 %31.7 %32.3 %
Employer Solutions Adjusted Gross Profit$200 $192 $604 $615 
Employer Solutions Adjusted Gross Profit Margin36.0 %34.9 %36.6 %36.7 %
Employer Solutions Segment Results of Operations for the Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023
Employer Solutions Revenue
Employer Solutions revenue was $555 million for the three months ended September 30, 2024 as compared to $550 million for the prior year period. The overall increase of $5 million was primarily driven by increases in recurring revenues from higher volumes and Net Commercial Activity, partially offset by lower project revenue.
Employer Solutions Gross Profit and Adjusted Gross Profit
Employer Solutions gross profit was $174 million for the three months ended September 30, 2024 compared to $166 million for the prior year period. The increase of $8 million was driven by an increase in revenue and lower expenses related to productivity initiatives, partially offset by increases in costs associated with funding growth of current and future revenues. Employer Solutions adjusted gross profit for the three months ended September 30, 2024 increased $8 million to $200 million from $192 million in the prior year period, primarily driven by an increase in revenue and lower expenses related to productivity initiatives, partially offset by increases in costs associated with funding growth of current and future revenues.
Employer Solutions Segment Results of Operations for the Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Employer Solutions Revenue
Employer Solutions revenue was $1,652 million for the nine months ended September 30, 2024 as compared to $1,678 million for the prior year period. The overall decrease of $26 million was primarily driven by decreases in recurring revenues from lower volumes, Net Commercial Activity and project revenue.
Employer Solutions Gross Profit and Adjusted Gross Profit
Employer Solutions gross profit was $523 million for the nine months ended September 30, 2024 compared to $542 million for the prior year period. The decrease of $19 million was driven by a decrease in revenue and increases in costs associated with funding growth of current and future revenues, partially offset by lower expenses related to productivity initiatives. Employer Solutions adjusted gross profit for the nine months ended September 30, 2024 decreased $11 million to $604 million from $615 million in the prior year period, primarily driven by a decrease in revenue and increases in costs associated with funding growth of current and future revenues, partially offset by lower expenses related to productivity initiatives.
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Gross Profit to Adjusted Gross Profit Reconciliation by Segment
Three Months Ended September 30, 2024
(in millions)Employer SolutionsOtherTotal
Gross Profit$174 $— $174 
Add: stock-based compensation3 — 3 
Add: depreciation and amortization23 — 23 
Adjusted Gross Profit$200 $— $200 
Gross Profit Margin31.4 %— %31.4 %
Adjusted Gross Profit Margin36.0 %— %36.0 %
Three Months Ended September 30, 2023
(in millions)Employer SolutionsOtherTotal
Gross Profit$166 $— $166 
Add: stock-based compensation7 — 7 
Add: depreciation and amortization19 — 19 
Adjusted Gross Profit$192 $— $192 
Gross Profit Margin30.2 %— %29.8 %
Adjusted Gross Profit Margin34.9 %— %34.5 %
Nine Months Ended September 30, 2024
(in millions)Employer SolutionsOtherTotal
Gross Profit$523 $— $523 
Add: stock-based compensation11 — 11 
Add: depreciation and amortization70 — 70 
Adjusted Gross Profit$604 $— $604 
Gross Profit Margin31.7 %— %31.7 %
Adjusted Gross Profit Margin36.6 %— %36.6 %
Nine Months Ended September 30, 2023
(in millions)Employer SolutionsOtherTotal
Gross Profit$542 $(2)$540 
Add: stock-based compensation21 — 21 
Add: depreciation and amortization52 2 54 
Adjusted Gross Profit$615 $— $615 
Gross Profit Margin32.3 %(7.7)%31.7 %
Adjusted Gross Profit Margin36.7 %— %36.1 %
LIQUIDITY AND CAPITAL RESOURCES
Executive Summary
Our primary sources of liquidity include our existing cash and cash equivalents, cash flows from operations and availability under our revolving credit facility. Our primary uses of liquidity are operating expenses, funding of our debt requirements and capital expenditures.
We believe that our available cash and cash equivalents, cash flows from operations and availability under our revolving credit facility will be sufficient to meet our liquidity needs, including principal and interest payments on debt obligations, capital expenditures, payments on our TRA and anticipated working capital requirements for the foreseeable future. We believe our liquidity position at September 30, 2024 remains strong. We will continue to closely monitor and proactively manage our liquidity position in consideration of the evolving economic outlook and changing interest rate
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environment. In July 2024, we paid down $440 million of the Sixth Incremental Term Loans balance and we fully repaid the principal balance of $300 million Secured Senior Notes with proceeds from the sale of our Payroll and Professional Services business that closed on July 12, 2024. We expect to use the remainder of after-tax cash proceeds to return capital and general corporate purposes, including reinvestment into growth opportunities.
In August 2022, we established a repurchase program allowing for authorized share repurchases. In March 2024, the Company’s Board of Directors authorized the repurchase of up to an additional $200 million of the Company’s Class A common stock. As of September 30, 2024, the total remaining amount authorized for repurchase was $93 million.
On June 18, 2024, the Company announced that it entered into an accelerated share repurchase agreement (the "ASR") with Barclays Bank PLC (the "ASR counterparty") to repurchase $75 million of Alight's Class A Common Stock, as part of the Company's existing share repurchase program. On July 16, 2024, the Company made an initial payment of $75 million to the ASR counterparty and received an initial delivery of shares equal in value to 80% of the prepayment amount of $75 million, based on Alight’s closing share price as of the effective date of July 15, 2024. The final number of shares repurchased was based on the volume-weighted average price of Alight's common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR. The ASR was settled on September 23, 2024, resulting in an additional delivery of 2,400,041 shares of Alight's Class A Common Stock.
On November 12, 2024 the Company announced that its Board of Directors approved a new quarterly dividend program. While the Company intends to continue paying regular cash dividends on a quarterly basis, any decision to declare and pay dividends in the future will be made at the sole discretion of our Board of Directors, whose decision will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions and other factors that our Board of Directors may deem relevant.
During the three months ended September 30, 2024, the Company repurchased 10,563,306 shares of Alight's Class A Common Stock in aggregate for $75 million as part of the ASR.
During the nine months ended September 30, 2024, there were 20,697,906 Class A Common Stock shares repurchased under the Program inclusive of shares repurchased under the ASR discussed above.
Cash on our balance sheet includes funds available for general corporate purposes. Funds held on behalf of clients in a fiduciary capacity are segregated and shown in Fiduciary assets on the Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023, with a corresponding amount in Fiduciary liabilities. Fiduciary funds are not used for general corporate purposes and are not a source of liquidity for us.
The following table provides a summary of cash flows from continuing operating, investing, and financing activities for the periods presented.
 Nine Months Ended September 30,
(in millions)20242023
Cash provided by operating activities - continuing operations$75 $226 
Cash provided by (used in) investing activities - continuing operations877 (114)
Cash used for financing activities - continuing operations(1,028)(135)
Operating Activities
Net cash provided by operating activities was $75 million for the nine months ended September 30, 2024 compared to $226 million for the nine months ended September 30, 2023. The decrease in cash provided by operating activities was primarily due to increased overhead expenses related to the sale of the Payroll and Professional Services business.
Investing Activities
Cash provided by investing activities increased $991 million to $877 million for the nine months ended September 30, 2024 from cash used in investing activities of $114 million for the prior year period, driven by net proceeds from the sale of Strada, partially offset by less capital expenditures.
Financing Activities
Cash used in financing activities for the nine months ended September 30, 2024 was $1,028 million as compared to cash used in financing activities of $135 million in the prior year. The primary drivers of cash used for financing activities were $759 million of debt repayments, $155 million of share repurchases, $62 million of TRA payments, $58 million of shares/units withheld in lieu of taxes, and $22 million of finance lease payments, partially offset by a $28 million
43

net increase in fiduciary liabilities. The increase in fiduciary cash is primarily due to timing of client funding and subsequent disbursement of payments.
Cash, Cash Equivalents and Fiduciary Assets
At September 30, 2024, our continuing operations cash and cash equivalents were $300 million, a decrease of $24 million from December 31, 2023. Of the total balances of cash and cash equivalents as of September 30, 2024 and December 31, 2023, none of the balances were restricted as to use.
Some of our client agreements require us to hold funds on behalf of clients to pay obligations on their behalf. The levels of Fiduciary assets and liabilities can fluctuate significantly, depending on when we collect the amounts from clients and make payments on their behalf. Such funds are not available to service our debt or for other corporate purposes. There is typically a short period of time between when the Company receives funds and when it pays obligations on behalf of clients. We are entitled to retain investment income earned on fiduciary funds, when investment strategies are deployed, in accordance with industry custom and practice, which has historically been immaterial. In our Condensed Consolidated Balance Sheets, the amount we report for Fiduciary assets and Fiduciary liabilities are equal. Our continuing operations Fiduciary assets included cash of $262 million and $234 million at September 30, 2024 and December 31, 2023, respectively.
Other Liquidity Matters
Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. For further information, see the “Risk Factors” section within Item 1A of our Annual Report.
We do not have any material business, operations or assets in Russia, Belarus or Ukraine and we have not been materially impacted by the actions of the Russian government. Our total revenues from these three countries are de minimis for all periods presented.
Tax Receivable Agreement
In connection with the Business Combination, we entered into the TRA with certain of our pre-Business Combination owners that provides for the payment by Alight to such owners of 85% of the benefits that Alight is deemed to realize as a result of the Company’s share of existing tax basis acquired in the Business Combination and other tax benefits related to entering into the Tax Receivable Agreement.
Actual tax benefits realized by Alight may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the TRA, will vary depending upon a number of factors, we expect that the payments that Alight may make under the TRA will be substantial. For the nine months ended September 30, 2024, we paid $62 million related to the TRA and no further payments are expected to be made during the remainder of 2024. As of September 30, 2024, we expect to make payments of approximately $119 million in 2025 and in the range of $155 million in 2026.
Contractual Obligations and Commitments
In March 2024, the Company entered into an agreement with a third-party provider in the ordinary course of business for the use of certain cloud services. Under this agreement, the Company is committed to purchase services totaling $250 million over a 5-year term. There have been no other material changes to our obligations and commitments during the nine months ended September 30, 2024.
Our material contractual obligations include debt, non-cancellable contractual service and purchase obligations and lease obligations. For additional information regarding debt and non-cancellable contractual service and purchases obligations, see the Condensed Consolidated Financial Statements within Item 1 of this Quarterly Report on Form 10-Q, Note 8 “Debt”, and Note 19 “Commitments and Contingencies”.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements.
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CRITICAL ACCOUNTING ESTIMATES
There were no material changes from the Critical Accounting Estimates disclosed in the Annual Report on Form 10-K for the year ended December 31, 2023. Please refer to "Critical Accounting Estimates" described in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For quantitative and qualitative disclosures about market risk, see Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report. Our exposures to market risk have not changed materially since the filing of the Annual Report.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required or necessary disclosures. Based on the aforementioned evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2024, the Company's disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are a party to a variety of legal proceedings that arise in the normal course of our business. While the results of these legal proceedings cannot be predicted with certainty, we believe that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on our results of operations or financial condition.
Item 1A. Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q include any of the risks described in our Annual Report filed with the SEC on February 29, 2024 and in our Quarterly Report on Form 10-Q filed with the SEC on May 8, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.
In addition to the risk factors previously disclosed under "Part I, Item IA. Risk Factors" in the Annual Report and “Part II, Item 1A. Risk Factors” in the Company’s Quarterly Report on Form 10-Q, each as discussed in the preceding paragraph, the following risk factor should be considered carefully in evaluating our Company and our business. Any of the following risks could materially and adversely affect our business financial condition and results of operations.

Although we currently pay a quarterly cash dividend, there can be no assurance that we will continue to declare and pay cash dividends in any particular amount or at all.
Our Board of Directors has adopted a dividend program, pursuant to which we intend to pay a cash dividend on our Class A Common Stock on a quarterly basis. The declaration and payment of any dividend is subject to the approval of our Board of Directors and our dividend may be discontinued or reduced at any time. Additionally, because we are a holding company with no material assets other than its direct and indirect ownership of equity interests in Alight Holdings, the Company has no independent means of generating revenue or cash flow, and our ability to pay cash dividends is dependent on the financial results and cash flows of Alight Holdings and its subsidiaries and the distributions that we receive from Alight Holdings. A reduction in, or cessation of, our quarterly dividend payments could have a negative effect on our reputation and could cause the market price of our Class A Common Stock to decline significantly. In addition, the payment of dividends is a use of cash, which may reduce the availability of cash for other business purposes, including investments, acquisitions, or repayment of indebtedness.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table provides information regarding purchases of our Class A Common Stock that were made by us during the three months ended September 30, 2024.
Total number of
shares purchased
Average price
paid per share(1)(2)
Total number of
shares purchased as
part of publicly
announced plans
or programs
Approximate dollar
value of shares that may
yet be purchased under
the plans or programs
(in millions) (2)
Beginning repurchase authority$168 
July 1, 2024 through July 31, 20248,163,265$— 8,163,26593 
August 1, 2024 through August 31, 2024—— —93 
September 1, 2024 through September 30, 20242,400,041— 2,400,04193 
Balance as of September 30, 202410,563,306$— 10,563,306$93 
_________________________________________________________
(1)Average price paid per share for open market purchases includes broker commissions.
(2)On June 18, 2024, we entered into an accelerated share repurchase agreement (the "ASR") with Barclays Bank PLC (the "ASR counterparty") to repurchase $75 million of Alight's Class A Common Stock, as part of the Company's existing share repurchase program. On July 16, 2024, we made an initial payment of $75 million to the ASR counterparty and received an initial delivery of shares equal in value to 80% of the prepayment amount of $75 million, based on Alight’s closing share price as of the effective date of July 15, 2024. The final number of shares repurchased was based on the volume-weighted average price of Alight's common stock during the term of the transaction, less a discount and subject to adjustments pursuant to the terms and conditions of the ASR. The ASR was settled on September 23, 2024, resulting in an additional delivery of 2,400,041
46

shares of Alight's Class A Common Stock. The Company repurchased in total 10,563,306 shares of Alight's Class A Common Stock for $75 million at an average price of $7.10 as part of the ASR. For additional information, see Note 9 in "Part I. Financial Information - Item 1. Financial Statements" in this report.

Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Trading Arrangements

During the three months ended September 30, 2024, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted, terminated, or modified a Rule 10b5-1 trading arrangement, or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended).
47

Item 6. Exhibits.
Exhibit
Number
Description
2.1
3.1
3.2
10.1
10.2
10.3
10.4*
10.5*
10.6*
10.7*
31.1*
31.2*
32.1**
32.2**
101.INS*Inline XBRL Instance Document
101.SCH*Inline XBRL Taxonomy Extension Schema Document With Embedded Linkbase Documents
104*Cover Page Interactive Data File (embedded within the Inline XBRL document)
__________________________________
* Filed herewith.
** Furnished herewith.
† The related exhibits and schedules are not being filed herewith. The registrant agrees to furnish supplementally a copy of any such exhibits and schedules to the Securities and Exchange Commission upon request.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Alight, Inc.
(Registrant)
Date: November 12, 2024
By:/s/ Jeremy Heaton
Jeremy Heaton
Chief Financial Officer
(Principal Financial Officer, Principal Accounting Officer and Authorized Signatory)
49