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What changed in Alight, Inc. / Delaware's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Alight, Inc. / Delaware's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+247 added−236 removedSource: 10-K (2026-02-24) vs 10-K (2025-02-27)

Top changes in Alight, Inc. / Delaware's 2025 10-K

247 paragraphs added · 236 removed · 173 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

18 edited+11 added−16 removed33 unchanged
Biggest changeSee Note 4, “Discontinued Operations” within the Consolidated Financial Statements for additional information regarding the Divestiture. Principal Services and Segment We currently operate under one reportable segment, Employer Solutions. Employer Solutions is driven by our Alight Worklife platform, and includes integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management and retiree healthcare.
Biggest changeEmployer Solutions is driven by our Alight Worklife platform, and includes integrated benefits administration, healthcare navigation, financial wellbeing, leave of absence management and retiree healthcare. We leverage data across numerous interactions and activities to improve the employee experience, reduce the operational costs and better inform management processes and decision-making.
Our solutions are supported through a secure and scalable cloud infrastructure, together with our core benefits processing platforms and consumer engagement tools and integrated with over 350 external platforms and partners. This includes our Alight Marketplace, a diverse network of third-party providers supporting additional wellbeing programs and needs of participants.
Our solutions are supported through a secure and scalable cloud infrastructure, together with our core benefits processing platforms and consumer engagement tools and integrated with over 350 external platforms and partners. This includes our Alight Partner Network, a diverse network of third-party providers supporting additional wellbeing programs and needs of participants.
Bassiouni served as Vice President, Benefits Delivery at Aon Hewitt from January 2013 until April 2017 and as Senior Director, Benefits Delivery from June 1998 until December 2012. Ms. Bassiouni has served as the President of the GLP Foundation since October 2018. Ms. Bassiouni holds a BBA in Business Management from Texas A&M University.
Bassiouni served as Vice President, Benefits Delivery at Aon Hewitt from January 2013 until April 2017 and as Senior Director, Benefits Delivery from June 1998 until December 2012. Ms. Bassiouni has served as the President of the GLP Foundation since October 2018. Ms. Bassiouni holds a bachelor's degree in Business Management from Texas A&M University.
Our primary competitors include Accolade, ADP, bswift, Businessolver, Conduent, Empower, Fidelity, Included Health, HealthEquity, Mercer, Personify, Sedgwick, Quantum Health, Voya, and WTW. We compete primarily on the basis of product and service quality, technology, breadth of offerings, ease of use and accessibility of technology, data protection, innovation, trust and reliability, price and reputation.
Our primary competitors include ADP, bswift, Businessolver, Conduent, Empower, Empyrean, Fidelity, HealthEquity, Included Health, Personify, Quantum Health, Sedgwick, Transcarent, Voya, and WTW. We compete primarily on the basis of product and service quality, technology, breadth of offerings, ease of use and accessibility of technology, data protection, innovation, trust and reliability, price and reputation.
Felli served as Executive Vice President, Chief Legal and Chief Administrative Officer at Blue Yonder Holding, Inc., a Blackstone Inc. (“Blackstone”) and New Mountain Capital (“New Mountain”) sponsored company, from 2018 to April 2022. Prior to that, Mr.
Felli served as Executive Vice President, Chief Legal and Chief Administrative Officer at Blue Yonder Holding, Inc., a Blackstone Inc. and New Mountain Capital sponsored company, from 2018 to April 2022. Prior to that, Mr.
Bassiouni served from June 2023 until December 2024 as Alight’s Executive Vice President, Customer Experience and Delivery, from February 2022 until June 2023 as Alight’s Senior Vice President, Health Delivery and as Vice President, Benefits Delivery at Alight from May 2017 until February 2022. Prior to joining Alight, Ms.
Prior to her appointment as Chief Delivery Officer, Ms. Bassiouni served from June 2023 until December 2024 as Alight’s Executive Vice President, Customer Experience and Delivery, from February 2022 until June 2023 as Alight’s Senior Vice President, Health Delivery and as Vice President, Benefits Delivery at Alight from May 2017 until February 2022. Prior to joining Alight, Ms.
Human Capital Management As of December 31, 2024, we employed more than 9,500 colleagues, approximately 90% of whom were located in North America. In the United States, 66% of our colleagues identified as female and 42% of our colleagues self-identified as a minority group. We believe that our relations with our colleagues in all locations are positive.
Human Capital Management As of December 31, 2025, we employed more than 9,500 colleagues, approximately 80% of whom were located in North America. In the United States, 67% of our colleagues identified as female and 42% of our colleagues self-identified as a minority group. We believe that our relations with our colleagues in all locations are positive.
Duggirala holds an MS in Electrical and Computer Engineering from Rutgers University and a BE in Electronics Engineering from Nagpur University. 8 Martin T. Felli has served as Alight’s Chief Legal Officer and Corporate Secretary since January 2023. Mr. Felli has more than 28 years of legal experience. Prior to joining Alight, Mr.
Duggirala holds a master's degree in Electrical and Computer Engineering from Rutgers University and a bachelor's degree in Electronics Engineering from Nagpur University. 8 Martin T. Felli has served as Alight’s Chief Legal Officer and Corporate Secretary since January 2023. Mr. Felli has more than 28 years of legal experience. Prior to joining Alight, Mr.
Item 1. Business. Throughout this section, references to “we,” “us,” and “our” refer to Alight and its consolidated subsidiaries as the context so requires. Alight is a technology-enabled services company delivering human capital management solutions to many of the world’s largest and most complex organizations.
Item 1. Business. Throughout this section, references to “we,” “us,” and “our” refer to Alight and its consolidated subsidiaries as the context so requires. Alight is a technology-enabled services company delivering human capital management solutions to many of the world’s largest and most complex organizations. This includes the implementation and administration of employee benefits (e.g., health, wealth and leaves) solutions.
The majority of our revenue is recognized over time when control of the promised services is transferred, and the clients simultaneously receive and consume the benefits of our services.
The majority of our revenue is recognized over time when control of the promised services is transferred, and the clients simultaneously receive and consume the benefits of our services. Payment terms are consistent with industry practice.
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.
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. Principal Services and Segment We currently operate under one reportable segment, Employer Solutions.
Our efforts have resulted in being recognized as a Great Place to Work® for the seventh consecutive year and being listed among the top 100 companies for remote workers by Flexjobs. Employee Wellbeing At Alight, we know that to improve others' lives, we must also strive to enrich the wellbeing of our employees.
Our efforts have resulted in being recognized as a Great Place to Work® and being named to Newsweek's America's Greatest Workplaces for 2025. Employee Wellbeing At Alight, we know that to improve others' lives, we must also strive to enrich the wellbeing of our employees.
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 benefits by providing an enterprise level, integrated offering designed to drive better outcomes for organizations and individuals.
Through Alight Worklife, the Company believes it is defining the future of employee benefits by providing an enterprise level, integrated offering designed to drive better outcomes for organizations and individuals.
We leverage data across numerous interactions and activities to improve the employee experience, reduce the 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.
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.
Payment terms are consistent with industry practice. 5 Technology We deliver our solutions through a set of proprietary and partner technologies, a well-developed network of providers and a structured approach to instill and sustain enterprise-wide practices of excellence.
See Note 4, “Discontinued Operations” within the Consolidated Financial Statements for additional information regarding the Divestiture. 5 Technology We deliver our solutions through a set of proprietary and partner technologies, a well-developed network of providers and a structured approach to instill and sustain enterprise-wide practices of excellence.
Felli holds a juris doctor degree from the University of Pennsylvania Law School and a B.A. magna cum laude from Baruch College. Gregory A. George has served as Alight’s Chief Commercial Officer at Alight since June 2023. Prior to joining Alight, Mr. George served as senior vice president and head of sales of Ceridian, from January 2021 to June 2023.
Felli holds a juris doctor degree from the University of Pennsylvania Law School and a bachelor's degree magna cum laude from Baruch College. Stephen Rush has served as Alight's Chief Commercial Officer since October 2025. Prior to this current role, Mr. Rush served as SVP & Head of Americas at HCL Software from May 2024 to September 2025.
We vigorously enforce and protect our trademarks. 7 Information about our Executive Officers The executive officers of the Company as of February 27, 2025 were as follows: Name Age Position David D. Guilmette 63 Chief Executive Officer and Vice Chair Jeremy J. Heaton 48 Chief Financial Officer Allison P.
We vigorously enforce and protect our trademarks. 7 Information about our Executive Officers The executive officers of the Company as of February 24, 2026 were as follows: Name Age Position Rohit Verma 51 Chief Executive Officer and Director Gregory Giometti 37 Interim Chief Financial Officer Allison P. Bassiouni 50 Chief Delivery Officer Deepika Duggirala 51 Chief Technology Officer Martin T.
This includes the implementation and administration of employee benefits (e.g., health, wealth and leaves benefits) solutions. 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.
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.
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Bassiouni 49 Chief Delivery Officer Deepika Duggirala 50 Chief Technology Officer Martin T. Felli 57 Chief Legal Officer and Corporate Secretary Gregory A. George 54 Chief Commercial Officer, North America Robert W. Sturrus 48 Chief Client Officer David D.
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Felli 58 Chief Legal Officer and Corporate Secretary Stephen Rush 56 Chief Commercial Officer, North America Donna Dorsey 55 Chief Human Resources Officer Rohit Verma has served as Alight’s Chief Executive Officer and a member of the Alight board of directors since January 2026. Prior to joining Alight, Mr.
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Guilmette has served as a member of the Alight board of directors (the “Board”) since May 2024, and as Vice Chair of the Board since July 2024. Mr. Guilmette was a member of the audit committee of the Board from May 2024 until his appointment as Chief Executive Officer in August 2024. Additionally, Mr.
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Verma served as President and Chief Executive Officer and a member of the board of directors at Crawford & Company (NYSE: CRD.A, CRD.B), a leading global provider of claims management and outsourcing solutions insurance companies and self-insured entities, since May 2020. Prior to joining Crawford & Company, Mr.
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Guilmette has served as the co-founder of WorldClass Health since March 2024. Mr.
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Verma served as the regional executive for the southern region of Zurich North America, where he was accountable for profitable growth and market execution. During his ten-year tenure at Zurich, Mr. Verma also served in a number of executive management positions across underwriting, finance, strategy and general management. Before joining Zurich, Mr.
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Guilmette most recently served in a number of senior leadership roles at Aon plc (NYSE: AON) (“Aon”) between November 2019 to March 2024, including strategic advisor to the CEO and President of Aon from February 2023 to March 2024 and CEO of Aon’s Global Health Solutions from November 2019 to January 2023. Before joining Aon, Mr.
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Verma was a management consultant at McKinsey & Company where he led several engagements with cross-functional teams of strategy, finance and IT. Mr. Verma currently serves on the board of directors for Ameritas Holding Company and is a member of industry advisory boards for Northwestern University and Georgia Institute of Technology. Mr.
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Guilmette served as President of Cigna Group’s (NYSE: CI) (“Cigna”) Global Employer segment from July 2012 to November 2019 and President of Cigna’s National, Pharmacy & Product division from 2010 to 2012. During Mr. Guilmette’s tenure with Cigna, he served on the Board of Managers of Cigna Ventures LLC and on Cigna’s Innovation Advisory Board as chair.
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Verma holds a master's degree in IT Management from Northwestern University and an undergraduate degree in Computer Engineering from Netaji Subhas Institute of Technology. Gregory Giometti has served as Alight's Interim Chief Financial Officer since January 2026. In addition, Mr. Giometti continues to serve as Alight’s Head of Financial Planning & Analysis (FP&A), driving enterprise-wide financial strategy and performance management.
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Prior to joining Cigna, Mr. Guilmette served as a Managing Director at Towers Perrin (n/k/a Willis Towers Watson PLC) (Nasdaq: WTW) between February 2005 to February 2010. Since August 2023, Mr. Guilmette has served on the board of SwordHealth. Mr. Guilmette holds a B.A. in Political Science from University of Chicago Jeremy J.
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Mr. Giometti has been with the Company since August 2020 in positions of increasing responsibility within the Company’s finance organization. Prior to his current roles, he served the Company as Vice President, Financial Planning and Analysis and Director, Financial Planning and Analysis, Business Intelligence and Transformation. Before joining Alight, Mr.
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Heaton has served as Alight’s Chief Financial Officer since May 2024. As Chief Financial Officer, Mr. Heaton leads day-to-day financial activities and is responsible for driving financial strategy and operational management. Previously, Mr.
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Giometti served in various financial capacities with Walgreens Boots Alliance, Paper Source, and Bank of Montreal (NYSE: BMO). Mr. Giometti holds a bachelor’s degree in economics from DePauw University and a Master of Business Administration from the University of Chicago Booth School of Business. Allison P. Bassiouni has served as Alight’s Chief Delivery Officer since January 2025.
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Heaton served as the Company’s Operating Chief Financial Officer from August 2023 to May 2024 and as Executive Vice President of Finance from May 2020 through August 2023.Prior to joining Alight, Mr. Heaton spent over 20 years at General Electric in global financial management with a focus in corporate finance, strategic planning, and mergers and acquisitions.
Added
Prior to that, Mr. Rush served as Alight’s Head of New Sales and Solutions – Global One Alight New Sales & Solutions Team from February 2017 to April 2024, and held numerous roles with increasing responsibility at Alight and its predecessors, including Hewitt and Aon Hewitt. Mr. Rush holds a bachelor’s degree in Economics from Drew University.
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From July 2018 to May 2020, Mr. Heaton served as the Transition Leader for GE Healthcare, where he led the sale of the biopharma business for $21 billion. From January 2003 to June 2018, Mr.
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Donna Dorsey has served as Alight’s Chief Human Resources Officer since June 2025. Prior to joining Alight, Ms. Dorsey served as Executive Vice President, Chief People and Culture Officer at International Motors (formerly Navistar) from February 2004 to May 2025, where she was responsible for enterprise-wide HR strategy. Prior to that, Ms.
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Heaton served in a number of capacities for GE, including as Chief Financial Officer, Office of the Board from January 2018 to June 2018 and Chief Financial Officer, GE Industrial Finance from January 2016 to December 2017. Mr. Heaton holds a B.S. in Finance from the University of Florida. Allison P.
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Dorsey held a number of human resource leadership roles with increasing responsibility at International Motors. Earlier in her career, she held roles with Sears, Roebuck and Co., American Hospital Association and Discover Financial Services. Ms. Dorsey currently serves on the board of directors for Root Inc. (Nasdaq: ROOT). Ms.
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Bassiouni has served as Alight’s Chief Delivery Officer since January 2025. Prior to her appointment as Chief Delivery Officer, Ms.
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Dorsey holds a bachelor’s degree in political science from Rutgers University and a juris doctor degree from Chicago-Kent College of Law with a certification in labor and employment law.
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In this role, Mr. George oversaw the growth of the company’s Human Capital Management ("HCM") platform and was responsible for Ceridian’s go to market strategy and worked alongside the leadership team to execute the company’s transformation strategy. From June 2007 to January 2021, Mr.
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George worked in a number of capacities at Oracle, where he most recently serviced as group vice president, responsible for national sales operations for the company’s enterprise resource planning, enterprise performance management, and supply chain management business units. Mr.
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George holds a bachelor’s degree from Butler University and has completed executive education programs at the University of Michigan’s Ross School of Business, IESE Business School University of Navarra, Barcelona, Spain, and the George Mason University School of Business in Virginia. Robert W. Sturrus has served as Alight’s Chief Client Officer since January 2025.
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Prior to his appointment as Chief Client Officer, Mr. Sturrus served as Alight’s Executive Vice President, Wealth Solutions from May 2017 through December 2024. Prior to joining Alight, Mr.
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Sturrus served in a number of capacities in Aon Hewitt and Hewitt Associates, most recently with Aon Hewitt as Senior Vice President, Defined Benefits from April 2016 to April 2017 and as Vice President, Benefits Delivery from October 2011 to April 2017. Mr. Sturrus holds a BS from Wake Forest University.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

64 edited+25 added−8 removed251 unchanged
Biggest changeIt is possible that our future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable disposition of these matters. 15 We may become involved in claims, litigation or other proceedings that could harm the value of our business.
Biggest changeThe ultimate outcome of these claims, lawsuits and other proceedings cannot be ascertained, and liabilities in indeterminate amounts may be imposed on us. It is possible that our future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable disposition of these matters.
One of our significant responsibilities is to maintain the security, including cybersecurity, and privacy of our employees’ and clients’ confidential and proprietary information and the confidential information about clients’ employees’ health, financial and wellbeing information and other personally identifiable information.
One of our significant responsibilities is to maintain the security, including cybersecurity, and privacy of our employees’ and clients’ confidential and proprietary information and confidential information about our clients’ employees’ health, financial and wellbeing information and other personally identifiable information.
Any decisions made regarding our quarterly dividend payments or our repurchase activities could have a negative effect on our reputation and could cause the market price of our Class A Common Stock to decline significantly.
Any decisions made regarding quarterly dividend payments or our repurchase activities could have a negative effect on our reputation and could cause the market price of our Class A Common Stock to decline significantly.
These potential developments include: • changes in regulations relating to health and welfare plans including potential challenges or changes to the Patient Protection and Affordable Care Act, expansion of government-sponsored coverage through Medicare or the creation of a single payer system, or changes to the employee tax exclusion and/or employer deduction for employer-provided healthcare benefits; • changes in regulations relating to defined contribution, defined benefit plans, and Individual Retirement Accounts (“IRAs”), including retirement plan and pension reform that could decrease the attractiveness of certain of our retirement products and services to retirement plan sponsors and administrators or have an unfavorable effect on our ability to earn revenues from these products and services; 13 • additional requirements respecting data privacy and data usage in jurisdictions in which we operate that may increase our costs of compliance and potentially reduce the manner in which data can be used by us to develop or further our product offerings; • changes in regulations relating to fiduciary rules; • changes in federal or state regulations relating to marketing and sale of Medicare plans, Medicare Advantage and Medicare Part D prescription drug plans; • changes to regulations of producers, brokers, agents or third-party administrators such as the Consolidated Appropriations Act of 2021, that may alter operational costs, the manner in which we market or are compensated for certain services or other aspects of our business; • changes to, or new, federal, state or provincial regulations relating to leave of absence programs or short-term or long-term disability plans, which could create more difficult and complex delivery requirements for our business leading to increased operational costs or increased enforcement and litigation for potential violations, including greater penalties for administrative errors; and • additional regulations or revisions to existing regulations promulgated by other regulatory bodies in jurisdictions in which we operate.
These potential developments include: • changes in regulations relating to health and welfare plans including potential challenges or changes to the Patient Protection and Affordable Care Act, expansion of government-sponsored coverage through Medicare or the creation of a single payer system, or changes to the employee tax exclusion and/or employer deduction for employer-provided healthcare benefits; • changes in regulations relating to defined contribution, defined benefit plans, and Individual Retirement Accounts (“IRAs”), including retirement plan and pension reform that could decrease the attractiveness of certain of our retirement products and services to retirement plan sponsors and administrators or have an unfavorable effect on our ability to earn revenues from these products and services; 14 • additional requirements respecting data privacy and data usage in jurisdictions in which we operate that may increase our costs of compliance and potentially reduce the manner in which data can be used by us to develop or further our product offerings; • changes in regulations relating to fiduciary rules; • changes in federal or state regulations relating to marketing and sale of Medicare plans, Medicare Advantage and Medicare Part D prescription drug plans; • changes to regulations of producers, brokers, agents or third-party administrators such as the Consolidated Appropriations Act of 2021, that may alter operational costs, the manner in which we market or are compensated for certain services or other aspects of our business; • changes to, or new, federal, state or provincial regulations relating to leave of absence programs or short-term or long-term disability plans, which could create more difficult and complex delivery requirements for our business leading to increased operational costs or increased enforcement and litigation for potential violations, including greater penalties for administrative errors; and • additional regulations or revisions to existing regulations promulgated by other regulatory bodies in jurisdictions in which we operate.
Accordingly, we are subject to legal, economic and market risks associated with operating in, and sourcing from, foreign countries, including: • difficulties in staffing and managing our offices, such as unexpected wage inflation, worker attrition, visa requirements, or job turnover, increased travel and infrastructure costs, as well as legal and compliance costs associated with multiple international locations; • fluctuations or unexpected volatility in foreign currency exchange rates and interest rates; • imposition or increase of investment and other restrictions by foreign governments; • extensive and sometimes conflicting regulations in the countries in which we do business; • restrictions on the import and export of technologies; and • trade barriers, tariffs or sanctions laws.
Accordingly, we are subject to legal, economic and market risks associated with operating in, and sourcing from, foreign countries, including: • difficulties in staffing and managing our offices, such as unexpected wage inflation, worker attrition, visa requirements, job turnover, increased travel and infrastructure costs, as well as legal and compliance costs associated with multiple international locations; • fluctuations or unexpected volatility in foreign currency exchange rates and interest rates; 19 • imposition or increase of investment and other restrictions by foreign governments; • extensive and sometimes conflicting regulations in the countries in which we do business; • restrictions on the import and export of technologies; and • trade barriers, tariffs or sanctions laws.
The Company is required to pay certain parties for most of the benefits relating to any additional tax depreciation or amortization deductions that we may claim as a result of the Company’s direct and indirect allocable share of existing tax basis acquired in the Business Combination, the Company’s increase in its allocable share of existing tax basis and anticipated tax basis adjustments we receive in connection with sales or exchanges of Alight Holdings Units after the Business Combination.
The Company is required to pay certain parties for most of the benefits relating to any additional tax depreciation or amortization deductions that we may claim as a result of the Company’s direct and indirect allocable share of existing 25 tax basis acquired in the Business Combination, the Company’s increase in its allocable share of existing tax basis and anticipated tax basis adjustments we receive in connection with sales or exchanges of Alight Holdings Units after the Business Combination.
These facilities are vulnerable to damage or interruption from catastrophic events, such as earthquakes, hurricanes, floods, fires, cyber security attacks (including "ransomware" and phishing attacks), terrorist attacks, power losses, telecommunications failures and similar events. The risk of cyber-attacks could be exacerbated by geopolitical tensions, including the ongoing Russia-Ukraine conflict, or other hostile actions taken by nation-states and terrorist organizations.
These facilities 11 are vulnerable to damage or interruption from catastrophic events, such as earthquakes, hurricanes, floods, fires, cyber security attacks (including "ransomware" and phishing attacks), terrorist attacks, power losses, telecommunications failures and similar events. The risk of cyber-attacks could be exacerbated by geopolitical tensions, including the ongoing Russia-Ukraine conflict, or other hostile actions taken by nation-states and terrorist organizations.
Outsourcing means that an entity contracts with a third party, such as us, to provide services rather than perform such services in-house. There can be no assurance that this interest will continue, as organizations may elect to perform such services themselves and/or the business process outsourcing industry could move to an as-a-service model, thereby eliminating traditional outsourcing tasks.
Outsourcing means that an entity contracts with a third party, such as us, to provide services rather than perform such services in-house. There can be no assurance that this interest will continue, as organizations may elect to perform such services themselves and/or the business process outsourcing industry could move to an as-a-service model, thereby eliminating traditional outsourcing 17 tasks.
Over time, some of our operating expenses will increase as we invest in additional infrastructure and implement new technologies to maintain our competitive position and meet our client service commitments. We must anticipate and respond to the dynamics of our industry and business by using quality systems, process management, improved asset utilization and effective supplier 20 management tools.
Over time, some of our operating expenses will increase as we invest in additional infrastructure and implement new technologies to maintain our competitive position and meet our client service commitments. We must anticipate and respond to the dynamics of our industry and business by using quality systems, process management, improved asset utilization and effective supplier management tools.
Negative public opinion could also result from actual or alleged conduct by us or those currently or formerly associated with us in any number of activities or circumstances, including operations, regulatory compliance, and the use and protection of data and systems, satisfaction of client expectations, and from actions taken by regulators or others in response to such conduct.
Negative public opinion could also result from actual or alleged conduct by us or those currently or formerly associated with us in any number of activities or circumstances, including operations, regulatory 18 compliance, and the use and protection of data and systems, satisfaction of client expectations, and from actions taken by regulators or others in response to such conduct.
The profitability of our engagements with clients may not meet our expectations due to unexpected costs, cost overruns, early contract terminations, unrealized assumptions used in our contract bidding process or the inability to maintain our prices in light of any inflationary circumstances. Our profitability is highly dependent upon our ability to control our costs and improve our efficiency.
The profitability of our engagements with clients may not meet our expectations due to unexpected costs, cost overruns, early contract terminations, unrealized assumptions used in our contract bidding process or the inability to maintain our prices in light of any inflationary and competitive circumstances. Our profitability is highly dependent upon our ability to control our costs and improve our efficiency.
A portion of the consideration received for the sale of the Divested business is contingent on the financial performance of the Divested Business. If the Divested Business does not meet certain performance metrics for the 2025 fiscal year, we will receive less consideration in the future than may 9 have been or may currently be projected by fair value measurements.
A portion of the consideration received for the sale of the Divested business is contingent on the financial performance of the Divested Business. If the Divested Business does not meet certain performance metrics for the 2025 fiscal year, we will receive less consideration in the future than may have been or may currently be projected by fair value measurements.
Further, the negative publicity that could arise from any such penalties, sanctions or findings could have an adverse effect on our reputation and reduce our ability to compete for 21 new contracts with both government and commercial clients. Moreover, government entities typically finance projects through appropriated funds.
Further, the negative publicity that could arise from any such penalties, sanctions or findings could have an adverse effect on our reputation and reduce our ability to compete for new contracts with both government and commercial clients. Moreover, government entities typically finance projects through appropriated funds.
In the course of performing our obligations under such agreement, we will continue to allocate certain of our resources, including assets, facilities, equipment and the time and attention of our management and other teammates, for the benefit of the Divested Business and not ours, which may negatively impact our financial condition or results of operations.
In the course of performing our obligations under such agreement, we will continue to allocate certain of our resources, including assets, equipment and the time and attention of our management and other teammates, for the benefit of the Divested Business and not ours, which may negatively impact our financial condition or results of operations.
If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. 26 Changes in our credit ratings could adversely impact our operations and lower our profitability.
If interest rates increase, our debt service obligations on our variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. Changes in our credit ratings could adversely impact our operations and lower our profitability.
In addition, new competitors, alliances among competitors or mergers of competitors could result in our competitors gaining significant market share and some of our competitors may have or may develop a lower cost structure, adopt more aggressive pricing policies or provide services that gain greater market acceptance than the services that we offer or develop.
In addition, new competitors, alliances among competitors or mergers of competitors could result in our competitors gaining significant 9 market share and some of our competitors may have or may develop a lower cost structure, adopt more aggressive pricing policies or provide services that gain greater market acceptance than the services that we offer or develop.
We anticipate that we will continue to rely on such third-party software and development tools from third parties in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, 18 this may not always be the case, or it may be difficult or costly to replace.
We anticipate that we will continue to rely on such third-party software and development tools from third parties in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace.
Furthermore, we face risks in successfully integrating any businesses we have acquired, might acquire, or that we have created or may create through a joint venture or similar arrangement. Ongoing business may be disrupted, and our management’s attention may be diverted by acquisition, investment, transition or integration activities.
Furthermore, we face risks in successfully integrating any businesses we have acquired, might acquire, or that we have created or may create through a joint venture or similar arrangement. Ongoing business may be disrupted, and our 16 management’s attention may be diverted by acquisition, investment, transition or integration activities.
The accelerated payments will relate to all relevant tax attributes then allocable to the Company in the case of an acceleration upon a change of control and to all relevant tax attributes allocable or that would be allocable to the Company (in the case of an election by the 25 Company to terminate the Tax Receivable Agreement early, assuming all Alight Holdings Units were then exchanged).
The accelerated payments will relate to all relevant tax attributes then allocable to the Company in the case of an acceleration upon a change of control and to all relevant tax attributes allocable or that would be allocable to the Company (in the case of an election by the Company to terminate the Tax Receivable Agreement early, assuming all Alight Holdings Units were then exchanged).
We may have difficulties as a result of entering into new markets where we have limited or no direct prior experience or where competitors may have stronger market positions. 16 We might fail to realize the expected benefits or strategic objectives of any acquisition, investment or joint venture we undertake.
We may have difficulties as a result of entering into new markets where we have limited or no direct prior experience or where competitors may have stronger market positions. We might fail to realize the expected benefits or strategic objectives of any acquisition, investment or joint venture we undertake.
In addition, any financial difficulties faced by our third-party data 10 center’s operator or any of the service providers with whom we or they contract may have negative effects on our business, the nature and extent of which are difficult to predict.
In addition, any financial difficulties faced by our third-party data center’s operator or any of the service providers with whom we or they contract may have negative effects on our business, the nature and extent of which are difficult to predict.
For so long as such 22 investors continue to own a significant percentage of the Class A Common Stock, such investors may be able to cause or prevent a change of control of our company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of our company.
For so long as such investors continue to own a significant percentage of the Class A Common Stock, such investors may be able to cause or prevent a change of control of our company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of our company.
Under the DLLCA, limited liability companies are generally 24 restricted from making distributions to their members to the extent that, after giving effect to any such distribution, the company’s liabilities (subject to certain limited exclusions) exceed the fair value of the company’s assets.
Under the DLLCA, limited liability companies are generally restricted from making distributions to their members to the extent that, after giving effect to any such distribution, the company’s liabilities (subject to certain limited exclusions) exceed the fair value of the company’s assets.
In addition, our operating results may fail to match our past performance and could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly operating results or dividends, if any, to shareholders, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of research reports about our industry, the performance of direct and indirect competitors, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or 23 enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about the industries we participate in or individual scandals.
In addition, our operating results may fail to match our past performance and could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly operating results or dividends, if any, to shareholders, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of research reports about our industry, the performance of direct and indirect competitors, announcements of technological developments, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations of similar companies, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about the industries we participate in or individual scandals.
If we are unable to manage the risks of our global operations, our results of operations could be materially adversely affected. 19 Our global delivery capability is concentrated in certain key operational centers, which may expose us to operational risks.
If we are unable to manage the risks of our global operations, our results of operations could be materially adversely affected. Our global delivery capability is concentrated in certain key operational centers, which may expose us to operational risks.
As a result, even in the absence of a change of control or an election to terminate the Tax Receivable Agreement, payments under the Tax Receivable Agreement could be in excess of 85% of the Company’s actual cash tax benefits.
As a result, even in the absence of a change of control or an election 26 to terminate the Tax Receivable Agreement, payments under the Tax Receivable Agreement could be in excess of 85% of the Company’s actual cash tax benefits.
Nevertheless, an actual or perceived security breach, a failure to make adequate disclosures to the public or law enforcement agencies following any such event or a significant and extended disruption in the functioning of our 11 information technology systems could damage our reputation and cause us to lose clients, adversely impact our operations, sales and operating results and require us to incur significant expense to address and remediate or otherwise resolve such issues.
Nevertheless, an actual or perceived security breach, a failure to make adequate disclosures to the public or law enforcement agencies following any such event or a significant and extended disruption in the functioning of our information technology systems could damage our reputation and cause us to lose clients, adversely impact our operations, 12 sales and operating results and require us to incur significant expense to address and remediate or otherwise resolve such issues.
In such circumstances, we would be responsible for payment of amounts that are not covered by insurance and that could have a material adverse impact on our business.
In such 15 circumstances, we would be responsible for payment of amounts that are not covered by insurance and that could have a material adverse impact on our business.
If a client is not satisfied with our services, it may be damaging to our business and could cause us to incur additional costs and impair profitability. Many of our clients are businesses that band together in industry groups and/or trade associations and actively share information among themselves about the quality of service they receive from their vendors.
If a client is not satisfied with our services, it may be damaging to our business and could cause us to incur additional costs and impact profitability. Many of our clients are businesses that band together in industry groups and/or trade associations and actively share information among themselves about the quality of service they receive from their vendors.
In connection with the Business Combination, we entered into a tax receivable agreement (the "Tax Receivable Agreement" or the "TRA") with certain of our pre-Business Combination owners (the "TRA Parties") that provides for the payment by the Company to such TRA Parties of 85% of the benefits, if any, that the Company is deemed to realize (calculated using certain assumptions) as a result of (i) the Company’s direct and indirect allocable share of existing tax basis acquired in the Business Combination, (ii) increases in the Company’s allocable share of existing tax basis and tax basis adjustments that will increase the tax basis of the tangible and intangible assets of Alight Holdings as a result of the Business Combination and as a result of sales or exchanges of Alight Holdings Units for shares of Class A Common Stock after the Business Combination and (iii) certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement.
In connection with the Business Combination, we entered into a tax receivable agreement (the "Tax Receivable Agreement" or the "TRA") with certain of our pre-Business Combination owners (including their assignees, the "TRA Parties") that provides for the payment by the Company to the TRA Parties of 85% of the benefits, if any, that the Company is deemed to realize (calculated using certain assumptions) as a result of (i) the Company’s direct and indirect allocable share of existing tax basis acquired in the Business Combination, (ii) increases in the Company’s allocable share of existing tax basis and tax basis adjustments that will increase the tax basis of the tangible and intangible assets of Alight Holdings as a result of the Business Combination and as a result of sales or exchanges of Alight Holdings Units for shares of Class A Common Stock after the Business Combination and (iii) certain other tax benefits related to entering into the Tax Receivable Agreement, including tax benefits attributable to payments under the Tax Receivable Agreement.
For example, an 12 engagement accounted for in calculating one of these measures could abruptly end for reasons out of our control. If we determine that we can no longer calculate these metrics with a sufficient degree of accuracy, and we cannot find an adequate replacement for the metric, our business or revenue may be harmed.
For example, an engagement accounted for in calculating one of these measures could abruptly end for reasons out of our 13 control. If we determine that we can no longer calculate these metrics with a sufficient degree of accuracy, and we cannot find an adequate replacement for the metric, our business or revenue may be harmed.
Based upon certain assumptions, we estimate that if the Company were to exercise its termination right as of December 31, 2024, the aggregate amount of these termination payments would be significantly in excess of the Tax Receivable Agreement liability recorded in the Consolidated Financial Statements within this Annual Report.
Based upon certain assumptions, we estimate that if the Company were to exercise its termination right as of December 31, 2025, the aggregate amount of these termination payments would be significantly in excess of the Tax Receivable Agreement liability recorded in the Consolidated Financial Statements within this Annual Report.
We must develop our personnel to provide succession 17 plans capable of maintaining continuity in the midst of the inevitable unpredictability of personnel retention.
We must develop our personnel to provide succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of personnel retention.
Although we use derivative financial instruments to some extent to manage a portion of our exposure to interest rate risks, we do not attempt to manage our entire exposure. As of December 31, 2024, we had approximately $2.0 billion of outstanding debt at variable interest rates.
Although we use derivative financial instruments to some extent to manage a portion of our exposure to interest rate risks, we do not attempt to manage our entire exposure. As of December 31, 2025, we had approximately $2.0 billion of outstanding debt at variable interest rates.
Failure to maintain credit ratings that provide access to debt markets at reasonable interest rates could increase our cost of borrowing, reduce our ability to obtain intra-day borrowing, which we may need to operate our business, and adversely impact our business, including our competitive position, results of operations, cash flows and financial condition. Item 1B. Unresolved Staff Comments. Not applicable.
Failure to maintain credit 27 ratings that provide access to debt markets at reasonable interest rates could increase our cost of borrowing, reduce our ability to obtain intra-day borrowing, which we may need to operate our business, and adversely impact our business, including our competitive position, results of operations, cash flows and financial condition. Item 1B. Unresolved Staff Comments.
We have a substantial amount of goodwill and purchased intangible assets on our consolidated balance sheet as a result of the Business Combination (as defined in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Business - Business Combination") and other acquisitions.
We have goodwill and purchased intangible assets on our consolidated balance sheet as a result of the Business Combination (as defined in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Business - Business Combination") and other acquisitions.
Risks Related to Our Business and Industry If we are unable to successfully execute the next phase of our strategic transformation, including our ability to effectively and appropriately separate the Divested Business, we may experience operational disruptions, which could negatively affect our business, financial condition and results of operations.
If we are unable to successfully execute the next phase of our strategic transformation, including our ability to effectively and appropriately separate the Divested Business, we may experience operational disruptions, which could negatively affect our business, financial condition and results of operations.
We rely on assumptions and estimates to calculate certain of our reported measures, and real or perceived inaccuracies in such measures may harm our reputation and negatively affect our business. Certain of the measures we disclose publicly, including our “annual recurring revenue,” “revenue under contract” and “bookings” measures, are calculated using metrics tracked by our internal teams.
We rely on assumptions and estimates to calculate certain of our reported measures, and real or perceived inaccuracies in such measures may harm our reputation and negatively affect our business. Certain of the measures we disclose publicly, which could include our “annual recurring revenue,” “revenue under contract” and “bookings” measures, are calculated using metrics tracked by our internal teams.
Our profitability is largely based on our ability to drive cost efficiencies during the term of our contracts for our services provided to clients. If we cannot drive suitable cost efficiencies, our profit margins will suffer. We might not be able to achieve the cost savings required to sustain and increase our profit margins.
Our profitability is largely based on our ability to drive cost efficiencies and maintain competitive rates during the term of our contracts for our services provided to clients. If we cannot drive suitable cost efficiencies, our profit margins will suffer. 20 We might not be able to achieve the cost savings required to sustain and increase our profit margins.
Our business model is dependent on our global delivery capability, which includes employees and third-party personnel based at various delivery centers around the world. While these delivery centers are located throughout the world, we have based large portions of our delivery capability in India, Poland and the Philippines.
Our business model is dependent on our global delivery capability, which includes employees and third-party personnel based at various delivery centers around the world. While these delivery centers are located throughout the world, we or third parties operating on our behalf have based large portions of our delivery capability in India, Poland and the Philippines.
See Note 20, “Commitments and Contingencies” within the Consolidated Financial Statements for further information regarding our active legal matters. Our failure to protect our intellectual property rights, or allegations that we have infringed on the intellectual property rights of others, could harm our reputation, ability to compete effectively and financial condition.
See Note 20, “Commitments and Contingencies” within the Consolidated Financial Statements within Item 8 of this Annual Report for further information regarding our active legal matters. Our failure to protect our intellectual property rights, or allegations that we have infringed on the intellectual property rights of others, could harm our reputation, ability to compete effectively and financial condition.
Problems faced by our data center locations, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their clients, including us, could adversely affect the availability and processing of our solutions and related services and the experience of our clients.
Problems faced by our data center locations, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their clients, including us, could adversely affect, and in some instances have adversely affected, the availability and processing of our solutions and related services and the experience of our clients.
Our Board of Directors recently 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.
Our Board of Directors previously adopted a dividend program, pursuant to which we paid 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 any dividend program may be discontinued or reduced at any time.
To the extent payments are due to the TRA Parties under the Tax Receivable Agreement, the payments are generally required to be made within ten business days after the tax benefit schedule (which sets forth the Company’s realized tax benefits covered by the Tax Receivable Agreement for the relevant taxable year) is finalized.
To the extent payments are due to the TRA Parties under the Tax Receivable Agreement, the payments are generally required to be made within ten business days after the tax benefit schedule (which sets forth the Company’s realized tax benefits covered by the Tax Receivable Agreement for the relevant taxable year) is finalized, and the calculations used to derive such payments are subject to review by the TRA Parties.
See Note 17 of the Consolidated Financial Statements for additional information on our restructuring program. Changes in accounting principles or in our accounting estimates and assumptions could negatively affect our financial position and results of operations.
See Note 17, "Restructuring" within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information on our restructuring program. Changes in accounting principles or in our accounting estimates and assumptions could negatively affect our financial position and results of operations.
Our success depends, in part, on our ability to develop and implement new or revised solutions that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client preferences.
Our success depends, in part, on our ability to develop and implement new or revised solutions that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client preferences, including adoption and use of AI and ML.
To respond to increased competition and pricing pressure, we may have to lower the cost of our solutions or decrease the level of service provided to clients, which could have an adverse effect on our financial condition or results of operations. We rely on complex information technology systems and networks to operate our business.
To respond to increased competition and pricing pressure, we may have to lower the cost of our solutions or decrease the level of service provided to clients, which could have an adverse effect on our financial condition or results of operations.
See Note 4 “Discontinued Operations” for more information on the fair value measurement of the contingent consideration. If the Divested Business is not successfully separated, or if we experience delays or disputes during the process of separation, investor confidence could decline.
See Note 4 “Discontinued Operations” within the Consolidated Financial Statements within Item 8 of this Annual Report for more information on the fair value measurement of the contingent consideration. If the Divested Business is not successfully separated, or if we experience delays or disputes during the process of separation, investor confidence could decline.
Our work with government clients exposes us to additional risks inherent in the government contracting environment. A portion of our revenues is derived from contracts with or on behalf of national, state, regional and local governments and their agencies. In some cases, our services to public sector clients are provided through or are dependent upon relationships with third parties.
A portion of our revenues is derived from contracts with or on behalf of national, state, regional and local governments and their agencies. In some cases, our services to public sector clients are provided through or are dependent upon relationships with third parties.
During the year ended December 31, 2024, the per share trading price of our Class A Common Stock fluctuated from a low of $6.52 to a high of $10.32. This market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our Class A Common Stock regardless of our operating performance.
During the year ended December 31, 2025, the per share trading close price of our Class A Common Stock fluctuated from a low of $1.94 to a high of $7.05. This market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our Class A Common Stock regardless of our operating performance.
Any significant system or network disruption could expose us to legal liability, impair our reputation or have a negative impact on our operations, sales and operating results and could expose us to litigation and negatively impact our relationships with clients.
We rely on complex information technology systems and networks to operate our business. Any significant system or network disruption could expose us to legal liability, impair our reputation or have a negative impact on our operations, sales and operating results and could expose us to litigation and negatively impact our relationships with clients.
There can be no assurance that pursuing strategic opportunities will result in any transactions or arrangements, and even if we do consummate a transaction or arrangement, there is no guarantee that such development will be accretive to our financial condition or results of operations. For more information on recent acquisitions, see Note 4, "Acquisitions" within the Consolidated Financial Statements.
There can be no assurance that pursuing strategic opportunities will result in any transactions or arrangements, and even if we do consummate a transaction or arrangement, there is no guarantee that such development will be accretive to our financial condition or results of operations.
We may experience unforeseen circumstances that adversely affect the value of our goodwill or other long-lived assets and trigger an evaluation of the recoverability of the recorded goodwill and other long-lived assets. Future goodwill or other long-lived asset impairment charges could materially impact our financial statements.
We may experience unforeseen circumstances that adversely affect the value of our goodwill or other long-lived assets and trigger an evaluation of the recoverability of the recorded goodwill and other long-lived assets.
If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our Class A Common Stock or trading volume to decline and our Class A Common Stock to be less liquid.
If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our Class A Common Stock or trading volume to decline and our Class A Common Stock to be less liquid. 23 The market price of shares of our Class A Common Stock has been, and may continue to be volatile and may decline regardless of our operating performance, which could cause the value of your investment to decline.
Accordingly, if the Divested Business is not separated successfully, our business, results of operations and financial condition may be materially adversely affected. An overall decline in economic activity could adversely affect the financial condition and results of operations of our business.
Accordingly, if the Divested Business is not separated successfully, our business, results of operations and financial condition may be materially adversely affected.
Employees, clients, or clients’ employees who are dissatisfied with our public statements, policies, practices, or solutions related to the development and use of AI and ML may express opinions that could introduce reputational or business harm, or legal liability.
Employees, clients, or clients’ employees who are dissatisfied with our public statements, policies, practices, or solutions related to the development and use of AI and ML may express opinions that could introduce reputational or business harm, or legal liability. We may not achieve our financial projections, which could have an adverse effect on our business, operating results, and financial condition.
Innovations in software, cloud computing or other technologies that alter how our services are delivered could significantly 14 undermine our investments in our business if we are slow or unable to take advantage of these developments or experience any unanticipated consequences from the deployment of such technologies.
Innovations in software, cloud computing or other technologies such as AI and ML that alter how our services are delivered could significantly undermine our investments in our business if we are slow or unable to take advantage of these developments or experience any unanticipated consequences from the deployment of such technologies. 10 We are continually developing and investing in innovative and novel service offerings, which we believe will address needs that we identify in the markets.
Separately, as of December 31, 2024, we had approximately $81 million remaining of authorization under our existing share repurchase program. The share repurchase 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.
The share repurchase 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.
We are subject to, and may become a party to, various claims, lawsuits or other proceedings that arise in the ordinary course of our business. Our business is subject to the risk of litigation or other proceedings involving current and former employees, clients, partners, suppliers, shareholders or others.
We may become involved in claims, litigation or other proceedings that could harm the value of our business. We are subject to, and may become a party to, various claims, lawsuits or other proceedings that arise in the ordinary course of our business.
Moreover, if the U.S. or other foreign tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted.
Moreover, if the U.S. or other foreign tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted. 22 Risks Related to Ownership of our Securities The Sponsor Investors have significant influence over the Company and their interests may conflict with the Company’s or its stockholders in the future.
Risks Related to Our Indebtedness Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly. Interest rates may increase in the future.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” Our variable rate indebtedness subjects us to interest rate risk, which could cause our indebtedness service obligations to increase significantly. Interest rates may increase in the future.
In addition, the payment of dividends and repurchases of shares are uses of cash, which may reduce the availability of cash for other business purposes, including investments, acquisitions, or repayment of indebtedness.
In addition, the payment of dividends and repurchases of shares are uses of cash, which may reduce the availability of cash for other business purposes, including investments, acquisitions, or repayment of indebtedness. There can be no assurance that we will be able to comply with the continued listing standards of NYSE for our Class A Common Stock.
These initiatives carry the risks associated with any new solution development effort, including cost overruns, delays in delivery and implementation and performance issues.
In some cases, these new offerings may require new or unique pricing structures, which may include performance guarantees or fees at risk that differ significantly from our historical practices. These initiatives carry the risks associated with any new solution development effort, including cost overruns, delays in delivery and implementation and performance issues.
For example, participants in our clients’ benefit plans could claim, and have claimed, that we did not adequately protect their data or secure access to their accounts. Regardless of the merits of the claims, the cost to defend these claims may be significant, and such matters can be time-consuming and divert management’s attention and resources.
Regardless of the merits of the claims, the cost to defend these claims may be significant, and such matters can be time-consuming and divert management’s attention and resources.
Removed
We are continually developing and investing in innovative and novel service offerings, which we believe will address needs that we identify in the markets. In some cases, these new offerings may require new or unique pricing structures, which may include performance guarantees or fees at risk that differ significantly from our historical practices.
Added
Risks Related to Our Business and Industry An overall decline in economic activity could adversely affect the financial condition and results of operations of our business.
Removed
The ultimate outcome of these claims, lawsuits and other proceedings cannot be ascertained, and liabilities in indeterminate amounts may be imposed on us.
Added
We typically provide financial projections such as our expected revenue growth and profitability. These financial projections are based on management’s assumptions and expectations at a point in time.
Removed
On February 20, 2023, the Company approved a restructuring program that includes, among other things, the elimination of full-time positions, termination of certain contracts, and asset impairments, primarily related to facilities consolidations. We recorded in the aggregate approximately $136 million in pre-tax restructuring charges associated with the restructuring program and the program was substantially complete as of December 31, 2024.
Added
Failure to achieve our financial projections have in the past and could in the future have an adverse effect on our business, operating results, financial condition and the market price of shares of our Class A Common Stock.
Removed
Additionally, The Organisation for Economic Co-operation and Development (OECD), an international association of 38 countries including the United States, has proposed changes to numerous long-standing tax principles, including its Pillar Two framework, which imposes a global minimum corporate tax rate of 15%.
Added
Our ability to forecast our future operating results is subject to a number of uncertainties, including our ability to plan for and model future growth. We have encountered and will continue to encounter risks and uncertainties in our business.
Removed
Certain countries in which we operate have enacted legislation to adopt the Pillar Two framework, and several other countries are also considering changes to their tax laws to implement this framework.
Added
If our assumptions regarding these uncertainties, which we use to plan our business, are incorrect or change in reaction to changes in our markets or other events, or if we do not address these risks successfully, our operating and financial results could differ materially from expectations, and our business and the market price of shares of our Class A Common Stock could be materially adversely affected.
Removed
While we do not expect the impact of Pillar Two to be material to our business, when and how this framework is adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S. and non-U.S. jurisdictions.
Added
Our business is subject to the risk of litigation or other proceedings involving current and former employees, clients, partners, suppliers, shareholders or others. For example, participants in our clients’ benefit plans could claim, and have claimed, that we did not adequately protect their data or secure access to their accounts.
Removed
Risks Related to Ownership of our Securities The Sponsor Investors have significant influence over the Company and their interests may conflict with the Company’s or its stockholders in the future.
Added
On May 6, 2025 , the Audit Committee of the Board of Directors of the Company approved a program (the “Post-Separation Plan” or “PSP”) intended to further optimize our operations following the sale of the Divested Business in July 2024.
Removed
The market price of shares of our Class A Common Stock has been, and may continue to be volatile and may decline regardless of our operating performance, which could cause the value of your investment to decline.
Added
The PSP includes simplifying our post-divestiture operating model, rationalizing our technology spend, expanding our use of artificial intelligence and automation and continued optimization of real estate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThis involvement helps drive integration of cybersecurity considerations into our Company’s broader strategic objectives. 27 Additionally, because Alight partners with a number of third parties in the ordinary course of business, our management team has developed and implemented processes to oversee and manage significant risks associated with use of third-party service providers.
Biggest changeThis involvement helps drive integration of cybersecurity considerations into our Company’s broader strategic objectives. Additionally, because Alight partners with a number of third parties in the ordinary course of business, our management team has developed and implemented processes to oversee and manage significant risks associated with use of third-party service providers.
We conduct thorough security assessments of critical third-party providers before engagement and periodically monitor vendor compliance with our security standards. The monitoring includes periodic assessments by our vendor management team and use of an independent vendor risk rating service that alerts Alight when there is a change in a service providers security posture.
We conduct thorough security assessments of critical third-party providers before engagement and periodically monitor vendor compliance with our security standards. The monitoring includes periodic assessments by our vendor management team and use of an independent vendor risk rating service that alerts Alight when 28 there is a change in a service providers security posture.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters is located in leased office space in downtown Chicago, Illinois. We currently use approximately 16,000 square feet of office space in our headquarters. The lease expires on January 31, 2031. We have additional offices in locations throughout the world, including Illinois, Texas, Florida, Georgia, Puerto Rico, Canada, Spain, India, and Poland.
Biggest changeItem 2. Properties. Our corporate headquarters is located in leased office space in downtown Chicago, Illinois. We currently use approximately 16,000 square feet of office space in our headquarters. The lease expires on January 31, 2031. We have additional offices in locations throughout the world, primarily in India, Texas, Illinois, Florida, Canada, and Puerto Rico.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWhile 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 4. Mine Safety Disclosures. Not applicable. 28 PART II
Biggest changeWhile 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 4. Mine Safety Disclosures. Not applicable. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−5 removed4 unchanged
Biggest changeThe Program does not obligate the 29 Company to purchase any particular number of shares and there is no guarantee as to any number of shares being repurchased by the Company. Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
The S&P 500 was selected because it serves as a broad market index. The Russell 2000 was selected because we do not believe we can reasonably identify an industry index or specific peer group that would offer a meaningful comparison. The Russell 2000 measures the performance of the small market capitalization segment of U.S. equity instruments.
The S&P 500 was selected because it serves as a broad market index. The Russell 2000 was selected because we do not believe we can 30 reasonably identify an industry index or specific peer group that would offer a meaningful comparison. The Russell 2000 measures the performance of the small market capitalization segment of U.S. equity instruments.
Performance The following graph compares the total shareholder return from July 2, 2021, the date on which our Class A Common Stock commenced trading on the NYSE, through December 31, 2024 of (i) our Class A Common Stock, (ii) the Standard and Poor's 500 Stock Index (“S&P 500”) and (iii) the Russell 2000 Index (the "Russell 2000").
Performance The following graph compares the total shareholder return from July 2, 2021, the date on which our Class A Common Stock commenced trading on the NYSE, through December 31, 2025 of (i) our Class A Common Stock, (ii) the Standard and Poor's 500 Stock Index (“S&P 500”) and (iii) the Russell 2000 Index (the "Russell 2000").
Holders of Record Set forth below are the numbers of holders of record for each of our classes of Common Stock as of February 17, 2025. Class Number of Holders of Record Class A Common Stock 12 Class B-1 Common Stock 89 Class B-2 Common Stock 89 Class V Common Stock 1 Sales of Unregistered Securities None.
Holders of Record Set forth below are the numbers of holders of record for each of our classes of Common Stock as of February 17, 2026. Class Number of Holders of Record Class A Common Stock 11 Class B-1 Common Stock 89 Class B-2 Common Stock 89 Class V Common Stock 1 Sales of Unregistered Securities None.
(2) 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.
Issuer Purchases of Equity Securities 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.
Market price information regarding our Class B-1 Common Stock, Class B-2 Common Stock and Class V Common Stock is not provided because there is no public market for such classes. In 2024, our Board of Directors approved a new quarterly dividend program. The Company intends to continue paying regular cash dividends on a quarterly basis.
Market price information regarding our Class B-1 Common Stock, Class B-2 Common Stock and Class V Common Stock is not provided because there is no public market for such classes. In 2024, our Board of Directors approved a quarterly dividend program.
Removed
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.
Added
The following table provides information with respect to quarterly dividends on common stock for the years ended December 31, 2025 and 2024: Declaration Date Dividends Per Share Total Payment (in millions) Record Date Payable Date November 12, 2024 $0.04 $21 December 2, 2024 December 16, 2024 February 13, 2025 $0.04 $21 March 3, 2025 March 17, 2025 April 30, 2025 $0.04 $22 June 2, 2025 June 16, 2025 July 23, 2025 $0.04 $22 September 2, 2025 September 15, 2025 November 5, 2025 $0.04 $21 December 1, 2025 December 15, 2025 On February 19, 2026, the Company announced it will replace its cash dividend on its Class A common stock, par value $0.0001 per share, with other capital allocation activities, including deleveraging the balance sheet and continuing our share repurchase program, subject to market and other conditions.
Removed
On November 12, 2024, our Board of Directors declared a regular cash dividend of $0.04 per share of Class A Common Stock, payable on December 16, 2024 to shareholders of record at the close of business on December 2, 2024. The dividend resulted in aggregate payments of approximately $21 million during the year ended December 31, 2024.
Added
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. We did not purchase any shares of our Class A Common Stock during the three months ended December 31, 2025.
Removed
On February 13, 2025, the Company announced that its Board of Directors approved the payment of a quarterly dividend in the amount of $0.04 per share of Class A Common Stock on March 17, 2025, to shareholders of record as of the close of business on March 3, 2025.
Removed
Issuer Purchases of Equity Securities The following table provides information regarding purchases of our Class A Common Stock that were made by us during the three months ended December 31, 2024.
Removed
Total number of shares purchased Average price paid per share (1) 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 $ 93 October 1, 2024 through October 31, 2024 — $ — — 93 November 1, 2024 through November 30, 2024 — — — 93 December 1, 2024 through December 31, 2024 1,629,811 7.36 1,629,811 81 Balance as of December 31, 2024 1,629,811 $ 7.36 1,629,811 $ 81 (1) Average price paid per share for open market purchases includes broker commissions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

78 edited+36 added−34 removed47 unchanged
Biggest changeEmployer Solutions adjusted gross profit for the year ended December 31, 2024 decreased $8 million to $904 million from $912 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. 39 Gross Profit to Adjusted Gross Profit Reconciliation Year Ended December 31, 2024 (in millions) Employer Solutions Other Total Gross Profit $ 794 $ — $ 794 Add: stock-based compensation 14 — 14 Add: depreciation and amortization 96 — 96 Adjusted Gross Profit $ 904 $ — $ 904 Gross Profit Margin 34.0 % — % 34.0 % Adjusted Gross Profit Margin 38.8 % — % 38.8 % Year Ended December 31, 2023 (in millions) Employer Solutions Other Total Gross Profit $ 812 $ (2) $ 810 Add: stock-based compensation 30 — 30 Add: depreciation and amortization 70 2 72 Adjusted Gross Profit $ 912 $ — $ 912 Gross Profit Margin 34.4 % (7.7) % 33.9 % Adjusted Gross Profit Margin 38.6 % — % 38.2 % Year Ended December 31, 2022 (in millions) Employer Solutions Other Total Gross Profit $ 687 $ (1) $ 686 Add: stock-based compensation 34 — 34 Add: depreciation and amortization 47 2 49 Adjusted Gross Profit $ 768 $ 1 $ 769 Gross Profit Margin 31.7 % (2.3) % 31.1 % Adjusted Gross Profit Margin 35.5 % 2.3 % 34.8 % 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.
Biggest changeGross Profit to Adjusted Gross Profit Reconciliation for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Year Ended December 31, (in millions) 2025 2024 2023 Gross Profit $ 765 $ 794 $ 810 Add: stock-based compensation 7 14 30 Add: depreciation and amortization 111 96 72 Adjusted Gross Profit $ 883 $ 904 $ 912 Gross Profit Margin 33.8 % 34.0 % 33.9 % Adjusted Gross Profit Margin 39.0 % 38.8 % 38.2 % Employer Solutions gross profit was $765 million for the year ended December 31, 2025 compared to $794 million for the prior year.
See ‘Non-GAAP Financial Measures’ below for further discussion. BUSINESS Overview Alight is a technology-enabled services company delivering human capital management solutions to many of the world’s largest and most complex organizations. This includes the implementation and administration of employee benefits (e.g. health, wealth and leaves benefits) solutions.
See ‘Non-GAAP Financial Measures’ below for further discussion. BUSINESS Overview Alight is a technology-enabled services company delivering human capital management solutions to many of the world’s largest and most complex organizations. This includes the implementation and administration of employee benefits (e.g. health, wealth and leaves) solutions.
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.
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.
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.
GAAP diluted earnings per share purposes. 37 (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.
GAAP diluted earnings per share purposes. 37 (7) 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.
GAAP”), and these provide a measure against which our businesses may be assessed in the future. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2024.
GAAP”), and these provide a measure against which our businesses may be assessed in the future. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2025.
This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
This MD&A is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the accompanying Notes to Financial Statements (Part II, Item 8 of this Form 10-K). This section generally discusses the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The Company incurred higher operating expenses in 2024 as a result of professional fees paid in conjunction with the Transaction. 31 EXECUTIVE SUMMARY OF FINANCIAL RESULTS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Alight.
The Company incurred higher operating expenses in 2024 as a result of professional fees paid in conjunction with the Transaction. 32 EXECUTIVE SUMMARY OF FINANCIAL RESULTS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand the results of operations and financial condition of Alight.
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 Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023, with a corresponding amount in Fiduciary liabilities.
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 Consolidated Balance Sheets as of December 31, 2025 and 2024, with a corresponding amount in Fiduciary liabilities.
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: Year Ended December 31, (in millions, except share and per share amounts) 2024 2023 2022 Numerator: Net Income (Loss) From Continuing Operations Attributable to Alight, Inc.
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: Year Ended December 31, (in millions, except share and per share amounts) 2025 2024 2023 Numerator: Net Income (Loss) From Continuing Operations Attributable to Alight, Inc.
(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.
(5) 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. (6) Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S.
As of December 31, 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 December 31, 2024.
As of December 31, 2025, 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 December 31, 2025.
Of the total balances of cash and cash equivalents as of December 31, 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.
Of the total balances of cash and cash equivalents as of December 31, 2025 and 2024, 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 amount of the expected future payments under the TRA has been discounted to its present value using a discount rate of 7.9%, which was determined based on benchmark rates of a similar duration.
The amount of the expected future payments under the TRA has been discounted to its present value using a discount rate of 7.4%, which was determined based on benchmark rates of a similar duration.
Both tranches have a seven-year duration. (7) Excludes approximately 10.9 million and 27.4 million performance-based units, which represents the gross number of shares expected to vest based on achievement of the respective performance conditions as of December 31, 2024 and 2023 , respectively.
Both tranches have a seven-year duration. (8) Excludes approximately 0.7 million, 10.9 million, and 27.4 million performance-based units, which represents the gross number of shares expected to vest based on achievement of the respective performance conditions as of December 31, 2025, 2024, and 2023 , respectively.
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 attributable to Alight, Inc., adjusted for intangible amortization and the impact of certain non-cash items that we 36 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 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 attributable to Alight, Inc., adjusted for intangible amortization and the impact of certain non-cash items, including goodwill impairment charges, that we do not consider in the evaluation of ongoing operational performance, is a 36 non-GAAP financial measure used solely for the purpose of calculating Adjusted Diluted Earnings Per Share From Continuing Operations.
The effective tax rate of 6% for the year ended December 31, 2023 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, and changes in valuation allowance. See Note 7 “Income Taxes” within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information.
The effective tax rate of 5% for the year ended December 31, 2024 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, and changes in valuation allowance. See Note 7, “Income Taxes” within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information.
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 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, including goodwill impairments, that we do not consider in the evaluation of ongoing operational performance.
In our Consolidated Balance Sheets, the amount we report for Fiduciary assets and Fiduciary liabilities are equal. Our continuing operations Fiduciary assets included cash of $239 million and $234 million at December 31, 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.
In our Consolidated Balance Sheets, the amount we report for Fiduciary assets and Fiduciary liabilities are equal. Our continuing operations Fiduciary assets included cash of $248 million and $239 million at December 31, 2025 and 2024, respectively. Other Liquidity Matters Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties.
Assets recognized for the costs to fulfill a contract are amortized on a systematic basis over the expected life of the underlying customer relationships. For further discussion, see Note 3 “Revenue from Contracts with Customers” within the Consolidated Financial Statements.
Assets recognized for the costs to fulfill a contract are amortized on a systematic basis over the expected life of 42 the underlying customer relationships. For further discussion, see Note 3, “Revenue from Contracts with Customers” within the Consolidated Financial Statements within Item 8 of this Annual Report.
Liabilities resulting from these exchanges are recorded on a gross undiscounted basis and are not remeasured at fair value. During the year ended December 31, 2024, an additional TRA liability of $90 million was established as a result of these exchanges.
Liabilities resulting from these exchanges are recorded on a gross undiscounted basis and are not remeasured at fair value. During the year ended December 31, 2025, an immaterial TRA liability was established as a result of these exchanges.
During 2018, the Company executed an agreement to form a strategic partnership with Wipro, a leading global information technology, consulting and business process services company, through 2028. As of December 31, 2024, the non-cancellable services obligation totaled $664 million, with $162 million expected to be paid over the twelve months ending December 31, 2025.
During 2018, the Company executed an agreement to form a strategic partnership with Wipro, a leading global information technology, consulting and business process services company, through 2029. As of December 31, 2025, the non-cancellable services obligation totaled $247 million, with $123 million expected to be paid over the twelve months ending December 31, 2026.
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.
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. Goodwill impairment Goodwill impairment consists of charges relating to Goodwill.
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, anticipated quarterly dividend payments, payments on our TRA and anticipated working capital requirements for the foreseeable future.
We currently anticipate 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 at least the next twelve months and for the foreseeable future.
Income Tax Expense (Benefit) Income tax benefit was $8 million for the year ended December 31, 2024, as compared to an income tax benefit of $20 million for the prior year period.
Income Tax Expense (Benefit) Income tax expense was $16 million for the year ended December 31, 2025, as compared to an income tax benefit of $8 million for the prior year.
Year Ended December 31, (in millions) 2024 2023 2022 Cash provided by operating activities - continuing operations $ 193 $ 247 $ 238 Cash provided by (used in) investing activities - continuing operations 847 (139) (218) Cash used for financing activities - continuing operations (1,096) (144) (184) 41 Operating Activities Net cash provided by operating activities was $193 million for the year ended December 31, 2024 compared to $247 million for the year ended December 31, 2023.
Year Ended December 31, (in millions) 2025 2024 2023 Cash provided by operating activities - continuing operations $ 360 $ 193 $ 247 Cash provided by (used in) investing activities - continuing operations (123) 847 (139) Cash used for financing activities - continuing operations (298) (1,096) (144) Operating Activities Net cash provided by operating activities was $360 million for the year ended December 31, 2025 compared to $193 million for the year ended December 31, 2024.
The following table sets forth our historical results of operations for the periods indicated below: Year Ended December 31, (in millions) 2024 2023 2022 Revenue $ 2,332 $ 2,386 $ 2,207 Cost of services, exclusive of depreciation and amortization 1,442 1,504 1,472 Depreciation and amortization 96 72 49 Gross Profit 794 810 686 Operating Expenses Selling, general and administrative 585 590 479 Depreciation and intangible amortization 299 301 301 Total Operating expenses 884 891 780 Operating Income (Loss) From Continuing Operations (90) (81) (94) Other (Income) Expense (Gain) Loss from change in fair value of financial instruments (57) 10 (38) (Gain) Loss from change in fair value of tax receivable agreement 34 118 (41) Interest expense 103 131 121 Other (income) expense, net (22) (3) (12) Total Other (income) expense, net 58 256 30 Income (Loss) From Continuing Operations Before Taxes (148) (337) (124) Income tax expense (benefit) (8) (20) 16 Net Income (Loss) From Continuing Operations (140) (317) (140) Net Income (Loss) From Discontinued Operations, Net of Tax (19) (45) 68 Net Income (Loss) (159) (362) (72) Net income (loss) attributable to noncontrolling interests (2) (17) (10) Net Income (Loss) Attributable to Alight, Inc. $ (157) $ (345) $ (62) REVIEW OF RESULTS Key Components of Our Continuing Operations Revenue Our clients’ demand for our services ultimately drives our revenues.
The following table sets forth our historical results of operations for the periods indicated below: Year Ended December 31, (in millions) 2025 2024 2023 Revenue $ 2,262 $ 2,332 $ 2,386 Cost of services, exclusive of depreciation and amortization 1,386 1,442 1,504 Depreciation and amortization 111 96 72 Gross Profit 765 794 810 Operating Expenses Selling, general and administrative 435 585 590 Depreciation and intangible amortization 296 299 301 Goodwill impairment 3,124 — — Total Operating expenses 3,855 884 891 Operating Income (Loss) From Continuing Operations (3,090) (90) (81) Other (Income) Expense (Gain) Loss from change in fair value of financial instruments (1) (57) 10 (Gain) Loss from change in fair value of tax receivable agreement (93) 34 118 Interest expense 92 103 131 Other (income) expense, net (26) (22) (3) Total Other (income) expense, net (28) 58 256 Income (Loss) From Continuing Operations Before Taxes (3,062) (148) (337) Income tax expense (benefit) 16 (8) (20) Net Income (Loss) From Continuing Operations (3,078) (140) (317) Net Income (Loss) From Discontinued Operations, Net of Tax (21) (19) (45) Net Income (Loss) (3,099) (159) (362) Net income (loss) attributable to noncontrolling interests (2) (2) (17) Net Income (Loss) Attributable to Alight, Inc. $ (3,097) $ (157) $ (345) REVIEW OF RESULTS Key Components of Our Continuing Operations Revenue Our clients’ demand for our services ultimately drives our revenues.
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 TRA.
For further information, see the “Risk Factors” section within Item 1A of this Annual Report. 41 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 TRA.
The increase in fiduciary cash was primarily due to timing of client funding and subsequent disbursement of payments. Cash, Cash Equivalents and Fiduciary Assets At December 31, 2024, our continuing operations cash and cash equivalents were $343 million, an increase of $19 million from December 31, 2023.
The increase in fiduciary cash was primarily due to timing of client funding and subsequent disbursement of payments. Cash, Cash Equivalents and Fiduciary Assets At December 31, 2025, our continuing operations cash and cash equivalents were $273 million, a decrease of $70 million from December 31, 2024.
The effective tax rate of 5% for the year ended December 31, 2024 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, and changes in valuation allowance.
The effective tax rate of (1)% for the year ended December 31, 2025 was lower than the 21% U.S. statutory corporate income tax rate primarily due to the Company’s non-deductible expenses, tax credits, changes in valuation allowance, and certain non-recurring items, including non-deductible goodwill impairment.
(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.
(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.
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.
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 use annual revenue retention rates as an important measure to manage our business. We calculate annual revenue retention on a gross basis by identifying the clients from whom we generated revenue in the prior year and determining what percentage of that revenue is generated from those same clients for the same solutions in the subsequent year.
We calculate annual revenue retention on a gross basis by identifying the clients from whom we generated revenue in the prior year and determining what percentage of that revenue is generated from those same clients for the same solutions in the subsequent year.
(1) $ (138) $ (300) $ (130) Conversion of noncontrolling interest (2) (17) (10) Intangible amortization 280 281 278 Share-based compensation 76 139 164 Transaction and integration expenses (2) 82 29 19 Restructuring 63 73 46 (Gain) Loss from change in fair value of financial instruments (57) 10 (38) (Gain) Loss from change in fair value of tax receivable agreement 34 118 (41) Other 8 1 (1) Tax effect of adjustments (3) (85) (100) (109) Adjusted Net Income From Continuing Operations $ 261 $ 234 $ 178 Denominator: Weighted average shares outstanding - basic 539,861,208 489,461,259 458,558,192 Dilutive effect of the exchange of noncontrolling interest units 510,237 — — Dilutive effect of RSUs — — — Weighted average shares outstanding - diluted 540,371,445 489,461,259 458,558,192 Exchange of noncontrolling interest units (4) 518,412 44,569,341 74,665,373 Impact of unvested RSUs (5) 7,325,106 10,080,390 7,624,817 Adjusted shares of Class A Common Stock outstanding - diluted (6)(7) 548,214,963 544,110,990 540,848,382 Basic (Net Loss) Earnings Per Share From Continuing Operations $ (0.25) $ (0.61) $ (0.28) Diluted (Net Loss) Earnings Per Share From Continuing Operations $ (0.25) $ (0.61) $ (0.28) Adjusted Diluted Earnings Per Share From Continuing Operations $ 0.48 $ 0.43 $ 0.33 __________________________________________________________ (1) Excludes the impact of discontinued operations.
(1) $ (3,076) $ (138) $ (300) Conversion of noncontrolling interest (2) (2) (17) Intangible amortization 281 280 281 Share-based compensation 19 76 139 Transaction and integration expenses (2) 16 82 29 Restructuring 55 63 73 (Gain) Loss from change in fair value of financial instruments (1) (57) 10 (Gain) Loss from change in fair value of tax receivable agreement (93) 34 118 Goodwill impairment and other (3) 3,128 8 1 Tax effect of adjustments (4) (61) (85) (100) Adjusted Net Income From Continuing Operations $ 266 $ 261 $ 234 Denominator: Weighted average shares outstanding - basic 527,567,685 539,861,208 489,461,259 Dilutive effect of the exchange of noncontrolling interest units — 510,237 — Dilutive effect of RSUs — — — Weighted average shares outstanding - diluted 527,567,685 540,371,445 489,461,259 Exchange of noncontrolling interest units (5) 506,234 518,412 44,569,341 Impact of unvested RSUs (6) 7,617,889 7,325,106 10,080,390 Adjusted shares of Class A Common Stock outstanding - diluted (7)(8) 535,691,808 548,214,963 544,110,990 Basic (Net Loss) Earnings Per Share From Continuing Operations $ (5.83) $ (0.25) $ (0.61) Diluted (Net Loss) Earnings Per Share From Continuing Operations $ (5.83) $ (0.25) $ (0.61) Adjusted Diluted Earnings Per Share From Continuing Operations $ 0.50 $ 0.48 $ 0.43 (1) Excludes the impact of discontinued operations.
Over the twelve months ending December 31, 2025, we expect to pay $25 million, $18 million, $16 million and $72 million for our debt, operating leases, finance leases and purchase obligations, respectively.
Over the twelve months ending December 31, 2026, we expect to pay $20 million, $17 million, $16 million and $83 million for our debt, operating leases, finance leases and purchase obligations, respectively.
The stock repurchase program does not obligate Alight to acquire any amount of common stock, and the program may be suspended or terminated at any time by Alight at its discretion without prior notice.
The stock repurchase program does not obligate Alight to acquire any amount of common stock, and the program may be suspended or terminated at any time by Alight at its discretion without prior notice. Cash Dividends In 2024, our Board of Directors approved a quarterly dividend program.
See Note 8 “Debt” for additional information. Other (Income) Expense, net Under the terms of the TSA as described in Note 4 "Discontinued Operations", the Company is providing technology infrastructure, risk and security, and various other corporate services to the Divested Business subsequent to the close.
Other (Income) Expense, net Under the terms of the TSA as described in Note 4, "Discontinued Operations" within the Consolidated Financial Statements within Item 8 of this Annual Report, the Company is providing technology infrastructure, risk and security, and various other corporate services to the Divested Business subsequent to the close.
A reconciliation of Adjusted EBITDA From Continuing Operations to Net Income (Loss) From Continuing Operations is as follows: Year Ended December 31, (in millions) 2024 2023 2022 Net Income (Loss) From Continuing Operations (1) $ (140) $ (317) $ (140) Interest expense 103 131 121 Income tax expense (benefit) (8) (20) 16 Depreciation 115 92 72 Intangible amortization 280 281 278 EBITDA From Continuing Operations 350 167 347 Share-based compensation 76 139 164 Transaction and integration expenses (2) 82 29 19 Restructuring 63 73 46 (Gain) Loss from change in fair value of financial instruments (57) 10 (38) (Gain) Loss from change in fair value of tax receivable agreement 34 118 (41) Other 8 1 (1) Adjusted EBITDA From Continuing Operations $ 556 $ 537 $ 496 Revenue $ 2,332 $ 2,386 $ 2,207 Adjusted EBITDA Margin From Continuing Operations (3) 23.8 % 22.5 % 22.5 % (1) Adjusted EBITDA excludes the impact of discontinued operations.
A reconciliation of Adjusted EBITDA From Continuing Operations to Net Income (Loss) From Continuing Operations is as follows: Year Ended December 31, (in millions) 2025 2024 2023 Net Income (Loss) From Continuing Operations $ (3,078) $ (140) $ (317) Interest expense 92 103 131 Income tax expense (benefit) 16 (8) (20) Depreciation 126 115 92 Intangible amortization 281 280 281 EBITDA From Continuing Operations (2,563) 350 167 Share-based compensation 19 76 139 Transaction and integration expenses (1) 16 82 29 Restructuring 55 63 73 (Gain) Loss from change in fair value of financial instruments (1) (57) 10 (Gain) Loss from change in fair value of tax receivable agreement (93) 34 118 Goodwill impairment and other (2) 3,128 8 1 Adjusted EBITDA From Continuing Operations (3) $ 561 $ 556 $ 537 Revenue $ 2,262 $ 2,332 $ 2,386 Adjusted EBITDA Margin From Continuing Operations (4) 24.8 % 23.8 % 22.5 % (1) Transaction and integration expenses primarily relate to acquisition and divestiture activities.
The primary drivers of cash used for financing activities were $765 million of debt repayments, $167 million of share repurchases, $62 million of TRA payments, $59 million of shares/units withheld in lieu of taxes, $27 million of finance lease payments, and dividend payments of $21 million, partially offset by a $5 million net increase in fiduciary liabilities.
The primary drivers of cash used for financing activities were $100 million of TRA payments, $86 million of dividend payments, $65 million of share repurchases, $22 million of finance lease payments, $20 million of debt repayments, and $12 million of shares/units withheld in lieu of taxes, partially offset by a $9 million net increase in fiduciary liabilities.
The increase in cash provided by investing activities was primarily driven by net proceeds from the sale of the Divested Business, and a decrease in capital expenditures. Financing Activities Cash used in financing activities for the year ended December 31, 2024 was $1,096 million as compared to cash used in financing activities of $144 million in the prior year.
Investing Activities Cash used in investing activities was $123 million for the year ended December 31, 2025 compared to cash provided by investing activities of $847 million for the prior year. The decrease in cash provided by investing activities was primarily driven by net proceeds from the sale of the Divested Business, partially offset by a decrease in capital expenditures.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024, noting the results for the year ended December 31, 2023 and year ended December 31, 2022 have since been recast in this Form 10-K.
For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025, which is incorporated herein by reference.
We recorded $19 million for services performed under the TSA for the year ended December 31, 2024 in Other (income) expense, net, and the corresponding expenses were recognized in Cost of services and Selling, general and administrative expense in the consolidated statement of comprehensive income (loss). 34 Income (Loss) From Continuing Operations Before Taxes Loss from continuing operations before taxes was $148 million for the year ended December 31, 2024 as compared to loss from continuing operations before taxes of $337 million for the year ended December 31, 2023.
The corresponding expenses were recognized in Cost of services and Selling, general and administrative expense in the Consolidated Statement of Comprehensive Income (Loss). 35 Income (Loss) From Continuing Operations Before Taxes Loss from continuing operations before taxes was $3,062 million for the year ended December 31, 2025 as compared to a loss from continuing operations before taxes of $148 million for the year ended December 31, 2024.
The Company uses a weighted average cost of capital that represents the blended average required rate of return for equity and debt capital based on observed market return data and company specific risk factors. During the fourth quarter of 2024, the Company performed a quantitative assessment in accordance with ASC 350.
The Company uses a weighted average cost of capital that represents the blended average required rate of return for equity and debt capital based on observed market return data and company-specific risk factors.
Change in Fair Value of Tax Receivable Agreement The change in the fair value of the TRA resulted in a loss of $34 million for the year ended December 31, 2024, a decrease of $84 million compared to a loss of $118 million for the prior year period.
Change in Fair Value of Tax Receivable Agreement The change in the fair value of the TRA resulted in a gain of $93 million for the year ended December 31, 2025, an increase of $127 million compared to a loss of $34 million for the prior year.
Goodwill Goodwill for each reporting unit is tested for impairment annually as of October 1, or more frequently if there are indicators that a reporting unit may be impaired.
The calculations used to derive such payments are subject to review by the TRA Parties. Goodwill Goodwill for each reporting unit is tested for impairment annually as of October 1, or more frequently if there are indicators that a reporting unit may be impaired.
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, forecasts, and the closing stock price for the period and are primarily related to the Seller Earnout and Additional Seller Note.
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, forecasts, and the closing stock price for the period. See Note 14, "Financial Instruments" within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information.
We used the remainder of after-tax cash proceeds to return capital and for general corporate purposes, including reinvestment into growth opportunities. 40 In January 2025, the Company entered into Amendment No. 11 to Credit Agreement with a syndicate of lenders to establish a new class of Seventh Incremental Term Loans with an aggregate principal amount of $2,030 million and to reprice the outstanding Sixth Incremental Term Loans due August 31, 2028 by reducing the applicable rate from SOFR + 2.25% to SOFR + 1.75%.
In January 2025, we entered into Amendment No. 11 to our credit agreement, dated as of May 1, 2017 (as amended from time to time, the "Credit Agreement"), with a syndicate of lenders to establish a new class of Seventh Incremental Term Loans with an aggregate principal amount of $2,030 million and to reprice the outstanding Sixth Incremental Term Loans due August 31, 2028 by reducing the applicable rate from SOFR + 2.25% to SOFR + 1.75%.
The change in fair value was due to the conversion of non-controlling interests during the year ended December 31, 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 the passage of time.
The change in fair value 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 the passage of time. Interest Expense Interest expense decreased $11 million for the year ended December 31, 2025, as compared to the prior year.
The overall decrease of $28 million was primarily driven by decreases in recurring revenues from lower volumes, Net Commercial Activity and project revenue. We experienced annual revenue retention rates of 95% and 97% in 2024 and 2023, respectively.
The overall decrease of $70 million was primaril y driven by decreases in net commercial activity and lower project revenue. We experienced annual revenue retention rates of 94% and 95% in 2025 and 2024, respectively.
The $857 million TRA liability balance at December 31, 2024 assumes: (i) a constant blended U.S. federal, state and local income tax rate of 26%, (ii) no material changes in tax law, (iii) the ability to utilize tax attributes based on current alternative tax forecasts, and (iv) 43 future payments under the TRA are made when due under the TRA.
The $664 million TRA liability balance at December 31, 2025 assumes: (i) a blended U.S. federal, state and local income tax rate of 26.5% ; (i i) the latest estimates in taxable income inclusive of the OBBBA which was enacted into law in the U.S. in July 2025; (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.
Cost of Services, exclusive of Depreciation and Amortization Cost of services, exclusive of depreciation and amortization, increased $32 million , or 2.2% , for the year ended December 31, 2023 as compared to the prior year period.
Cost of Services, exclusive of Depreciation and Amortization Cost of services, exclusive of depreciation and amortization, decreased $56 million, or 3.9%, for the year ended December 31, 2025 as compared to the prior year.
A hypothetical increase or decrease of 75 bps in the discount rate assumptions used for fiscal year 2024, would result in a change in our TRA liability balance of approximately $18 million.
A hypothetical increase of 75 bps in the discount rate assumption used for fiscal year 2025 would result in a decrease of approximately $21 million in our TRA liability, while a hypothetical decrease of 75 bps in the discount rate assumption used for fiscal year 2025 would result in an increase of approximately $23 million in our TRA liability.
Other significant assumptions utilized included the Company’s projections of expected future revenues and EBITDA margin, which is defined as earnings before interest, taxes, depreciation and intangible amortization as a percentage of revenue. The Company determined the fair value of its reporting units exceeded the carrying value as of October 1, 2024, and therefore, goodwill was not impaired.
Other significant assumptions utilized included the Company’s projections of expected future revenues and EBITDA margin, which is defined as earnings before interest, taxes, depreciation and intangible amortization as a percentage of revenue.
We utilized a discount rate of 11.0% and a long-term growth rate of 3.5% for our Health Solutions and Wealth Solutions reporting units in the determination of fair value.
We utilized a discount rate of 11.75% and a long-term growth rate of 3.5% for our Health Solutions and Wealth Solutions reporting units in the determination of fair value. The Company's Wealth Solutions reporting unit estimated fair value exceeded its carrying value by 16.6%, or approximately $77 million.
The decrease in cash provided by operating activities was primarily due to increased expenses related to the sale of the Payroll and Professional Services business. Investing Activities Cash provided by investing activities was $847 million for the year ended December 31, 2024 from cash used in investing activities of $139 million for the prior year period.
The decrease in cash provided by operating activities was primarily due to increased expenses related to the sale of the Divested Business. 39 Free cash flow was $250 million for the year ended December 31, 2025 compared to $72 million from the prior period.
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) 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.
We evaluated the potential for goodwill impairment by considering macroeconomic conditions, industry and market conditions, cost factors, both current and future expected financial performance, and relevant entity-specific events for each of the reporting units. We also considered our overall market performance discretely as well as in relation to our peers.
On October 1, 2025, the Company performed its annual goodwill impairment assessment in accordance with ASC 350. We evaluated the potential for goodwill impairment by considering macroeconomic conditions, industry and market conditions, cost factors, both current and future expected financial performance, and relevant entity-specific events for each of the reporting units.
Cost of Services, exclusive of Depreciation and Amortization Cost of services, exclusive of depreciation and amortization, decreased $62 million, or 4.1%, for the year ended December 31, 2024 as compared to the prior year period. The decrease was primarily driven by lower revenues and, lower compensation and benefits expenses, primarily stock-based compensation and savings realized in conjunction with productivity initiatives.
The decrease was primarily driven by a decrease in lower revenue and savings realized in conjunction with productivity initiatives, partially offset by an increase in compensation . Depreciation and Amortization Depreciation and amortization expenses increased by $15 million, or 15.6%, for the year ended December 31, 2025 as compared to the prior year, primarily driven by capitalized software.
Share Repurchases 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.
Share Repurchases Our board of directors has authorized a share repurchase program of our Class A common stock, which commenced in August 2022 and does not have an expiration date. On February 13, 2025, the Company’s Board of Directors authorized the repurchase of up to an additional $200 million of our Class A Common Stock.
Results of Continuing Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Revenue Revenues were $2,332 million for the year ended December 31, 2024 as compared to $2,386 million for the prior year period.
Results of Continuing Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue Revenues were $2,262 million for the year ended December 31, 2025 as compared to $2,332 million for the prior year. The decrease of $70 million, or 3.0%, was driven by lower Net Commercial Activity and lower project revenue.
Change in Fair Value of Financial Instruments There was a $57 million gain related to the change in the fair value of financial instruments for the year ended December 31, 2024 compared to a loss of $10 million for the prior year period.
Change in Fair Value of Financial Instruments There was a $1 million gain related to the change in the fair value of financial instruments for the year ended December 31, 2025 compared to a gain of $57 million for the prior year, primarily due to the $50 million write down of our Additional Seller Note in the year ended December 31, 2025, partially offset by a gain on remeasurement of the Seller Earnout.
During the year ended December 31, 2024, there were 22,327,717 Class A Common Stock shares repurchased under the Program inclusive of shares repurchased under the ASR discussed above. As of December 31, 2024, the total remaining amount authorized for repurchase was $81 million.
As of December 31, 2025 , the total remaining amount authorized for repurchase was $216 million. During the year ended December 31, 2025 , we repurchased 13,881,417 shares of Class A Common Stock for an aggregate purchase price of $65 million under the share repurchase program.
We define client losses as instances where clients do not renew or terminate their arrangements in relation to individual 32 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.
We define client wins as sales to new clients and sales of new solutions to existing clients. 33 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 use annual revenue retention rates as an important measure to manage our business.
Interest Expense Interest expense decreased $28 million for the year ended December 31, 2024 as compared to the prior year period. The decrease was primarily due to the partial repayment of debt during the year , the opportunistic repricing of our 2028 term loan and higher interest income, partially offset by the Company's hedges.
The decrease was primarily due to the partial repayment of debt in the prior year and the opportunistic repricing of our 2028 term loan, partially offset by the Company's hedges and lower interest income. See Note 8, “Debt” within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information.
Under this agreement, the Company is committed to purchase services totaling $286 million over a five years term. For the year ended December 31, 2024, the Company had various obligations and commitments outstanding including debt of $2,025 million, operating leases of $73 million, finance leases of $58 million and purchase obligations of $286 million.
Contractual Obligations and Commitments For the year ended December 31, 2025, the Company had various obligations and commitments outstanding including debt of $2,005 million, operating leases of $67 million, finance leases of $47 million and purchase obligations of $242 million.
Depreciation and Amortization Depreciation and amortization expenses increased by $24 million, or 33.3%, as compared to the prior year period, primarily driven by capitalized software. Selling, General and Administrative Selling, general and administrative expenses decreased $5 million, or 0.8%, for the year ended December 31, 2024 as compared to the prior year period.
Selling, General and Administrative Selling, general and administrative expenses decreased $150 million, or 25.6%, for the year ended December 31, 2025 as compared to the prior year.
See Note 14 "Financial Instruments" within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information.
There was no impairment recognized for the year ended December 31, 2024. See Note 6 "Goodwill and Intangible assets, net" within the Consolidated Financial Statements within Item 8 of this Annual Report for additional information.
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.
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 38 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.
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 higher professional fees related to the sale and separation of our Payroll and Professional Services businesses.
The decrease was driven by lower professional fees incurred related to the sale and separation of the Divested Business, a reduction in stock based compensation expense and productivity savings, partially offset by an increase in compensation expense.
For the year ended December 31, 2024, we recorded BPaaS revenue of $499 million, which represented growth of 15.0% compared to the prior year period. 33 Recurring revenues for the year ended December 31, 2024 decreased by $32 million, or 1.5%, from $2,167 million in the prior year period to $2,135 million and were primarily driven by lower volumes and Net Commercial Activity.
The Company experienced lower than expected bookings and larger than anticipated losses from contract renewals during the year ended December 31, 2025, which impacted revenue growth and is also expected to impact revenue growth in fiscal year 2026. 34 Recurring revenues for the year ended December 31, 2025 decreased by $27 million, or 1.3%, from $2,135 million in the prior year to $2,108 million, primarily driven by lower Net Commercial Activity.
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 and the non-operating fair value remeasurements of financial instruments and the TRA.
The increase in loss was primarily attributable to the $3,124 million non-cash goodwill impairment charge and the non-operating fair value remeasurements of financial instruments, partially offset by lower selling, general and administrative expenses, a change in fair value remeasurements of the tax receivable agreement and lower interest expense as a result of the debt pay down.
The decrease of $18 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.
The decrease of $29 million was driven by lower revenues and an increase in compensation expense, partially offset by productivity savings.
A hypothetical 25-basis point increase in the discount rate or a hypothetical 50-basis point decrease in the long-term growth rate could have resulted in a goodwill impairment in the Company’s Health Solutions reporting unit of $125 million. At December 31, 2024, our Health Solutions and Wealth Solutions reporting units had $3,084 million and $128 million of goodwill, respectively.
A hypothetical 25-basis point increase in the discount rate or a hypothetical 50-basis point decrease in the long-term growth rate would still provide the Company with an excess fair value over its carrying value of 14.5%, or approximately $67 million, in the Company's Wealth Solutions reporting unit.
Depreciation and Intangible Amortization Depreciation and intangible amortization expenses decreased by $2 million, or 0.7%, and was consistent compared to the prior year period.
Depreciation and Intangible Amortization Depreciation and intangible amortization expenses decreased by $3 million, or 1.0%, for the year ended December 31, 2025 as compared to the prior year. Goodwill Impairment During the year ended December 31, 2025, the Company identified indicators of impairment and recorded a $3,124 million non-cash impairment charge for the period.
Employer Solutions Gross Profit and Adjusted Gross Profit Employer Solutions gross profit was $794 million for the year ended December 31, 2024 compared to $812 million for the prior year period.
The increase in free cash flow was primarily due to an increase in cash provided from operations and lower capital expenditures. Free cash flow was $72 million for the year ended December 31, 2024 compared to $107 million from the prior period.
Income (Loss) From Continuing Operations Before Taxes Loss from continuing operations before taxes was $337 million for the year ended December 31, 2023 as compared to loss from continuing operations before taxes of $124 million for the year ended December 31, 2022.
Net cash provided by operating activities was $193 million for the year ended December 31, 2024 as compared to $247 million for the year ended December 31, 2023.
We believe that presenting adjusted gross profit and adjusted gross profit margin percent is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods. 38 Employer Solutions Results Year Ended December 31, ($ in millions) 2024 2023 2022 Employer Solutions Revenue Recurring $ 2,135 $ 2,141 $ 1,960 Project 197 219 204 Total Employer Solutions Revenue $ 2,332 $ 2,360 $ 2,164 Employer Solutions Gross Profit $ 794 $ 812 $ 687 Employer Solutions Gross Profit Margin 34.0 % 34.4 % 31.7 % Employer Solutions Adjusted Gross Profit $ 904 $ 912 $ 768 Employer Solutions Adjusted Gross Profit Margin 38.8 % 38.6 % 35.5 % Employer Solutions Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Employer Solutions Revenue Employer Solutions revenue was $2,332 million for the year ended December 31, 2024 as compared to $2,360 million for the prior year period.
Employer Solutions Results of Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Revenue Year Ended December 31, ($ in millions) 2025 2024 2023 Employer Solutions Revenue Recurring $ 2,108 $ 2,135 $ 2,141 Project 154 197 219 Total Employer Solutions Revenue $ 2,262 $ 2,332 $ 2,360 Employer Solutions reven ue was $2,262 million for th e year ended December 31, 2025 as compared to $2,332 million for the prior year.
Change in Fair Value of Financial Instruments There was a loss of $10 million related to the change in the fair value of financial instruments for the year ended December 31, 2023 compared to a gain of $38 million for the prior year period.
Financing Activities Cash used in financing activities for the year ended December 31, 2025 was $298 million as compared to cash used in financing activities of $1,096 million in the prior year.
Removed
The decrease of $54 million, or 2.3%, was driven by lower volumes, Net Commercial Activity, project revenue and the wind-down of our Hosted business operations.
Added
We review goodwill for impairment annually on October 1st and more frequently if events or changes in circumstances indicate that an impairment may exist. If the carrying value of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed4 unchanged
Biggest changeMore information regarding the terms and market value of our derivative instruments can be found in Note 13 "Derivative Financial Instruments" and in Note 16 "Fair Value Measurement" within the Consolidated Financial Statements. Our term loan agreements include an interest rate floor of 50 basis points (“bps”) plus a margin based on defined ratios.
Biggest changeMore information regarding the terms and market value of our derivative instruments can be found in Note 13, "Derivative Financial Instruments" and in Note 16, "Fair Value Measurement" within the Consolidated Financial Statements within Item 8 of this Annual Report. Our term loan agreements include an interest rate floor of 50 basis points (“bps”) plus a margin.
For more information 44 regarding our term loans and their applicable variable rates, see Note 8 "Debt" within the Consolidated Financial Statements within Item 8 of this Annual Report. 45
For more information regarding our term 44 loans and their applicable variable rates, see Note 8, "Debt" within the Consolidated Financial Statements within Item 8 of this Annual Report. 45
We also utilized interest rate swap agreements (designated as cash flow hedges) to fix portions of the floating interest rates through December 2026. A hypothetical increase of 25 bps in our term loans, net of hedging activity, would have resulted in a change to annual interest expense of approximately $1 million in fiscal year 2024.
We also utilized interest rate swap agreements (designated as cash flow hedges) to fix portions of the floating interest rates through December 2026. A hypothetical increase of 25 bps in our term loans, net of hedging activity, would have resulted in a change to annual interest expense of approximately $1 million in fiscal year 2025.

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