... Good morning, everyone. My name's Pete Christiansen. I'm on Citi's fintech team, do a little bit of crypto business services, info services, little lend tech, but we're here to talk about benefits administration. And it was pointed out to me earlier, there's a direct inverse relationship to the number of people in the room versus how your stock performs after. That's too bad for the previous company, but no, I think the company and the stock has gone through a bit of volatility lately. Perhaps there's a lot of misunderstanding, so that obviously presents an opportunity. So I definitely wanna delve into that. Great. Misperceptions, opportunity are key things here right now, but first, this company's gone through a lot of transformation, but one thing I do wanna spend a little bit of time on, with Dave being at the helm for a year. Give us some highlights on how the business has transformed. Sure ... since Dave has come on board. Sure. I mean, since, you know, really it was timed Dave joining. We had just divested the payroll and professional services business. You know, right CEO, right time with... You know, we are an employee benefits services company enabled by great technology, and so we're smaller, we are more focused, and it's been back to basics of how we provide the best service we can to our current clients, how we leverage the domain expertise that we have with decades in this industry, and retake our position in the market. We've been the leader in this space for a very long period of time. I think the narrative became a bit mixed between the technology work that we had done since 2021, and who we are and what we do. And so I think resetting that narrative with the market, with the third-party evaluators, with our clients, and then get back to operating the business and delivering on what we do every day for these clients, growing the business, driving better retention of the current client base. And then a lot of what we've really we're benefiting now from, in the transformation around the cloud migration- Mm-hmm ... which was a huge lift for us over the last couple of years, which we're benefiting now. And the technology that we've got that now sets a platform in the cloud for AI technology, for how we deliver better for our clients, the experience that their employees, you know, can see every day from Alight Worklife and what we're doing. And so it's very tactical in terms of the operations of this business right now. You had a great Analyst Day this year, and I think what underscored that, that Analyst Day was, "Hey, this company is now back on offense." And having a reset just in your capabilities and your infrastructure allows you to accelerate that offensive move. Maybe you touch upon some of the strategic areas that you're focusing on now, parts of the business where you think, you know, you're most empowered to really make a difference and move the needle. Sure. I mean, first and foremost, you know, return to growth is a key focus for us, and so we need to execute on the great pipeline that we've got. We've got great coverage in the market, and so growth is an element that we laid out, our target growth model of 4%-6%, which we've been able, you know, to see those results historically in this business. And so it's, again, building the pipeline back with the focus around employee benefit services that we can drive. We need to execute better commercially than we did in the first half, for sure. The other element on top of just the what is core to what we've been able to sell for years is now with more partnerships. We have, on the Alight Worklife platform, distribution to 35 million participants. It's very nascent in terms of the revenue that we've seen from partnerships historically. And so now with that platform, now with our new Chief Strategy Officer, David Essary, many of the relationships that he and Dave Guilmette have. One example was the Goldman Sachs partnership. Yeah ... we just announced this quarter. It's elements like that, of leveraging the partnership, the distribution that we have. There are many partners that want to be on the platform. How do we monetize that? And so that alone could be a nice growth driver for us next year around Goldman Sachs, and I think a huge element of what you should likely see at, you know, probably every quarter, at every earnings call, talking about new partnerships that we're driving, which would really be incremental to the types of revenue streams that we've seen historically, and is really important for us. I think the other part of it is just, you know, domain expertise around the solutions that we're selling. We're bringing in a new chief commercial officer. Again, this is not a revamp of a go-to-market, but really just focused on having the right domain expertise and industry expertise when it comes down to selling and closing deals. But again, I think it's those elements and as well as the operating model for how we deliver in AI. I mean, those are really the big elements for us strategically. Sounds very exciting. The stock has not acted according to that exciting opportunity there. In some of the areas, you know, improvement is interesting. I think you brought the midpoint down 2%, and the stock was off X%. We're also in just that type of a market environment- Sure, sure ... which I think is fair to acknowledge. But, I mean, you were surprised by some of the softness that you saw in the bookings there. The partnership approach is really great, I think, as you layer them on and you season them, and it sounds like there's a lot of tangential opportunities there. But what's, like, the feet on the ground kind of saying right now with the booking softness that you had in the first half, maybe also with the write-down? What are some of the misperceptions that investors may have? I think you know, growth is important in this business. We've certainly. I mean, we held everything else in terms of the guide for the year. So from a margin transformation, you know, what we've been able to transform and deliver on the margins, irrespective of the top line, the free cash flow in this business, the strength of the balance sheet, growth is, I think the biggest objective as we hear it in the eyes of investors. And I again, we have a great pipeline. We have the final stage within the pipeline is up 35%, which generally carries a much higher conversion of win rates. And then those deals, we sign them, and then we implement them, and then they go live. So there's a bit of timing of we... You know, our plan was to close more deals in the first half, so that's on us around execution. The deals are there. We have a great team that's got great coverage in the market to build the pipeline. Again, back to a little bit of domain expertise to make sure we have the right people in the room and the right stages to close on those deals, but I think the growth is the biggest aspect that investors are looking for and that we're talking through. We're very confident in terms of getting back to the target growth model in this business, you know, even with you know, the thinking through the benefits of partnership. Those are the biggest pieces, I think, for us, and why there's been you know, the reaction coming out of earnings. The project environment remains, you know, you know, lighter than we would expect. You know, we did expect the first half to be down. Pipeline didn't quite build in the way that we thought it might for the second half, and so we're still watching that. That work will come back to us, for sure. That is our work to do. We've got teams on the ground, and so they're still working with clients every day around that. And so when that inflects, that helps growth. It also helps on the margin mix, because- Sure ...that carries, you know, call it 90% margin on that project work. So we feel good in terms of, you know, most of the operating mechanisms that are in place and the metrics that we're watching, but it's back to growth for us as most important. And that project business, understandably, is very difficult to predict. It's very ad hoc, and would imagine that, you know, in the current environment, there are a lot of changes that are going on. Eventually, at some point, there should be hopefully a benefit there. But as it relates to, I think investors understand the first half, second-half cadence that you typically go through on the sales side and the implementation side. But is it some of the deals that we maybe didn't close? Is that a function more of your prospective clients just delaying decisions or rescheduling implementations? It's not. Like you said, you're not losing any of the pipeline. Is it more of just a timing function? We see it as timing, and especially in where we are expanding new deals to expand current client relationships. That's really where we've seen a delay in terms of the closing of those deals. Some of that's macro, some of that is deal-specific, maybe in terms of where those deals are. But again, they're sitting in that, you know, late stage of the pipeline, and, you know, some of those deals were closed early this quarter, some of those in our expectations here for the second half. So that's the big... You know, no big change in the competitive space, no big changes on the product side, so it's really just execution and getting those deals to closing, which we've done. We had, you know, double-digit growth in our bookings last year, so, you know, we feel very confident in terms of our ability to close these deals. So maybe higher growth in 2026 offer an easier comp? Correct. Just pointing that out. So you mentioned AI as a key strategic focus. Help us understand the vision and where you think some of those benefits are gonna play through. Sure. It's really kind of three personas that we look at. One is in the face of the, you know, the personal usage around the employee experience, and so you can continue to personalize those, you know, the benefits, what you can see in the Alight Worklife platform, the journeys that any certain employee might be going on through a life event that connects, you know, benefits administration through 401(k) investments, through leave administration, if you need to take time off for a life event, how that, you know, then connects to navigation to get you to the right care provider and the right cost within your network, and, you know, claims savings for a large client. So that's on the employee basis. Second persona is just for the company who hires us, right? To what is the type of reporting so they can see where benefits are, and the right dashboards, and self-reporting, and connectivity across different solutions with our delivery teams, and so AI can drive a lot of that, you know, in those repetitive processes and the reporting that's available, and then finally, the third persona is our own colleagues, how we deliver that work and the AI technology to be able to, you know, provide work in a much more seamless way of what we can do, and we get a benefit for that from a margin standpoint in what we're doing, but we also watch what we're doing there in terms of the customer, you know, expectations and the scoring that we get on customer satisfaction. So anything we're gonna do, the customers and the clients are - they're along the journey with us, and we need to make sure that we're doing that together. And so that's always gonna be the timing aspect, is making sure that we're doing that in the face of clients together and not going too fast or accelerating beyond what we've got. But, you know, what we laid out at Investor Day, we've got line of sight to all the actions and the work streams that drive that margin inflection. Right ... for us in the platform. What's not included there is some of the things we don't know. And so you think even from three or four months ago, the things that we're seeing that are available today in the technology. We announced the partnerships that we're expanding on with Microsoft and IBM. There's, you know, innovation labs and great technology of things that we didn't even see months ago, and so that wouldn't be in the profile today. And so I think that's additive in both the value we can drive for clients and what we can do internally. ... It's interesting, I for my own personal life events, I've been an Alight superuser this year. Love that. All positive things, fantastic. It's been great, and I would say the customer service has really been impressive. It is a great solution, but I do also wanna talk about... You mentioned a bunch of partnerships here, specifically the Goldman Sachs. Yeah ... partnership deal there. Can you describe how you view that partnership? What drove you perhaps to Goldman Sachs, or maybe a little bit of behind the scenes, how things were kind of the formation there on this partnership, and- Sure ... and what is the vision? How do you see this really benefiting not just the financials of Alight, but also its brand recognition, and- Sure ... that, that sort of thing? Yeah, so it's a great partnership. It, it's in our wealth business, in the 401(k), so the defined contribution solution for our business, where we have... Again, we handle the record keeping for the 401(k)s, and then we have advisors. So we have a, we have a product called, you know, Alight Financial Advisors, where you can provide, you know... Again, the client selects us for this product, and then the employees can engage with these advisors to help them with their investments within the 401(k). We've had Edelman Financial Engines as one advisor, now Goldman is joining as a second advisor. The way that this works is, one, it provides a great service to employees of the clients that have AFA with us. Goldman's a great name in the space, offers a great set of products and services, and advisory capabilities. Great name brand. We have a big relationship with Goldman, as we, as we do with many others. But great with Goldman, that our wealth team's been working on this partnership for quite some time. And the way that this works is, we'll build assets under management as those clients move their money into the advisory world with Goldman, and we'll generate basis points of a fee on top of that assets under management, similar to what we have with Edelman today. And so this kind of just builds a little bit over time, but we expect that this could be 0.5 point to 1 point of growth for us, even into next year, with the clients that we're talking to, and what we would expect to see in terms of take-up, in terms of the advisory work. And so just one example of, again, conversations that we've been having with Goldman for quite some time, and building out this partnership. So it's great for them. Again, 35 million participants in, you know, from a distribution capability, so a great benefit for them as well. But importantly, it's a different revenue stream for us, outside of per employee per month fees, which is about 90% of our revenue. So we'll get the question often around things like, "What is AI doing with white-collar employment in the world, and how do you think about that as a factor in terms of your business?" I look at this and say, "These are different revenue streams, which are independent of employee counts." And so I think about it as incremental growth. It could also be a hedge if there was ever an impact, although we don't see that today in terms of overall employee counts. But getting those different types of revenue streams is really important for us, just to diversify. I also kind of think of it, and correct me if I'm wrong, it's a little bit of a success begets success, as you get a large partner like that. And we've heard they're okay. Personally. Just kidding. But this opens the door to even more partnerships. You're saying, "Oh, you got this guy now, you could bring in this person as well." I mean, do you see that element kind of developing right now? It's- We do. Just like you would see a commercial pipeline on the sales side- Right ... we have a partnership pipeline now. So David Essary, our new Chief Strategy Officer, comes in with just a ton of domain and industry expertise, has a number of big relationships within the space, and he's got a team now on the partnership side that's building a pipeline. And so like I said, you expect to see more of a kind of continuum here for us on new partnerships, some within the space on the wealth side, others very big on the health side. Right. But just, again, there's an element of demand that we see now because, again, with the distribution of 35 million, if you're a young, you know, kind of a growing, upstart program in the health or wellness space, getting that distribution, I mean, is a huge growth opportunity to join our network. The other part of it is just what a valuation can do to smaller companies that get that immediate distribution. Sure. And so us being able to participate in some of that change in valuation- It's gotta be amazingly capital efficient, right? I mean, 0.5 points of growth from this... Correct. So it's- You don't have to build out this infrastructure. You don't. It's- It's- You don't have to build it from scratch. It's... I mean, it's bolt-ons. It's APIs. Right. The ease of how do you make it just seamless in terms of the integration capabilities, and then the co-marketing and co-innovation- Right ... that you do together? The partnership growth approach should not be underestimated- Correct ... at least the potential there. That's right. That, that's very, very exciting. I do want to talk a little bit about the recurring business, which was down in 2Q. You know, can you just talk about some of the variability that you're seeing there? I know there's base growth, and employment hiring has kind of been slowing. Has that been a component? Is it pricing? Like, just walk us through some of the drivers. Sure, sure. So typically, what you would see in the recurring business quarter to quarter, so if there's, you know, variability on client counts. Now, we typically would see that a little bit in advance, because you're seeing, you know, employee changes happen. They might go into COBRA if there's a large-scale, you know, downsizing that's happening in one of our clients. But even on the margins, you would see a bit of changes and variability. Some of that's just seasonality. Mm of different types of businesses and industries that drive maybe higher employment counts in the summertime versus in the holiday season. With that, you also see, you know, when we have churn, smaller. You know, the mid-market businesses, you have new wins going live, you have some churn of losses. That can happen more mid-year versus the larger enterprise clients, which are typically kind of a one-one of every year from a timeframe of go-lives. And so that smaller deal churn can kinda happen mid-year. And then you always have, you know, whether it's a contract true- you know, just- Right ... client-specific items that happen quarter to quarter, that could be a true-up within a contract, updates that you're having. Some are new adds, some are declines. But you typically get some variability that would happen, but again, starts... You know, it stays within a point, as we see it, typically quarter to quarter. And so we wouldn't expect anything, you know, material to happen in that recurring business. We look at that revenue under contract, you know, going out for three years. We get, you know, pretty strong certainty in terms of where that is. We don't include renewals until they're actually signed. Mm-hmm. But yeah, quarter to quarter, you're gonna see general variability on a recurring business base of, you know, call it $2.1 billion. Are you feeling good about momentum and retention? I mean, I know that wasn't an issue last year. Do you feel like you've plugged some of the holes there or gotten smarter on managing? We do. We feel really good in terms of the retention side of this business. You know, 2023 was kind of, call it, a low point, a tougher year in terms of being notified of losses, and then we've felt the impact of that on the revenue side through 2024 and 2025. You know, we've got a team in place now with client management structure. Rob Stier runs that group. That team wakes up every day with our top 160 to 170 clients, looking at how we're delivering for those clients, the services that we're providing, commitments that we made through the sales cycle that we need to make sure that we're delivering on from a product and delivery standpoint. And then when delivery and client health is in a great place, what are the opportunities to grow with those current clients? But it starts with the retention side. If you've got the same team that's trying to sell and manage retention, sometimes the pendulum can swing too hard in one area. And so I think what we saw a couple of years ago was more of the intensity around selling, while losing a bit of the narrative with the clients on where we were going and the focus, and having higher losses. And so we had a much better performance in cycle in 2024. We're seeing that continue in 2025. But there's still opportunity for us to get back to what I'd call our, you know, best, you know, historical best in terms of retention, where we were at, call it, 98% revenue retention for the company. That's at about, you know, 93.5% this year. We've got a ways to go, but it's a real opportunity for us that we feel good about. That's great. I mean, a lot of these things are super encouraging. It's you have high incremental margin, partnership growth contribution coming on stream soon. Despite some of the sales slowdown that you have right now, you're maintaining your EBITDA and your free cash flow guidance. Right. You still feel good about that. You're certainly making advances with your new infrastructure and AI, and adding new capabilities. You feel better about retention. I mean, like, the checklist just keeps going. That's right. Yes, granted, the non-recurring revenue, the project work, that's just challenging, but it will come back at some point. I mean, there is- That's right ... there are some timing elements there. So it seems like it's just more time for all these pieces to kinda all come together. It's- That's right. And I think that's- It's a longer cycle business. I think it's important for everybody to... You know, every contract is three to five years. Right. The buying cycle for large, especially in the large enterprise, can be one to two years, right? Where we're... You're not sitting around and waiting for an RFP. Right. You're proactively leveraging a relationship, talking with the third-party evaluators, which is a, you know, an important relationship. I'd say also a checkbox- Yes ... it's just, you know, building that relationship back with those third-party evaluators, and so importantly. But it takes time, one, for the sales cycle and the elements of our renewed focus here to kinda take hold with, you know, both our current clients and new opportunities. Then you get into the actual- Right ... contractual aspects of it. You win the deal, then it can take 6-12 months to implement this. So, you know, what we see day-to-day inside the business feels better sometimes than maybe the financial expression of the business as that part starts to take hold. And so there's a bit of this long-cycle nature of this business that takes some time to kinda see the improvements, you know, in the results- Right ... of what we expect to see. But you're right, we do feel really good in terms of if you looked at the action item list that we had to execute on. But again, I think importantly, you know, where we left the quarter was just to execute commercially and sell the, you know, close the deals. So, I think of Alight's, I guess, theme, their story, areas to think about, is in three phases, right? You have your... And I'm gonna work backwards here. The financial impact, which we're all, you know, hoping to see, and obviously using that as a proxy to evaluate the stock. Then you got your contractual period, where you've signed in these new clients, you're managing the implementation, the onboarding, and also optimizing your existing clients- That's right ... and providing additional value to them, and then we go to the front of the curve is the pipeline. Mm. And it seems like there's encouraging points in the first two-thirds. Right. On the pipeline, can you talk a little bit about sales cycle? What are you seeing there? So- And I'm gonna dovetail that into another question. I'm purposely asking you this one first. Okay, got it. So we feel good about the pipeline. I mean, but that being said, we have felt good about the pipeline for the last few quarters. I mean, we do have a great pipeline. We have an enterprise sales structure to get better coverage that we... You know, it's a change we made back in 2023 to drive better coverage, top of funnel, more deals coming in, more deals qualified. And so now we've got, with some of the delays in the first half, that finalist stage in the pipeline is up 35% versus where it was at the same time last year. That stage always has a higher win rate because you're typically either just working through a contract, or you maybe have one other competitor that's still- Mm ... in the deal, and so versus having maybe six or seven competitors in the space. So we feel good in terms of pipeline inflow. It's the, it's the win rate, so the conversion on those deals, that we need to execute on here in the second half. But there's no shortage of demand in the market for this space. It's mission-critical work, so regardless of maybe where the macro is, people need, you know, benefits for their companies. Right. They need to be able to provide it. We've been in the space for four decades. We've got good coverage. We need to continue to bring in those new deals into the pipeline, and then just close them at a higher rate, similar to what we did last year when we had double-digit bookings growth. All right, part B of this question: Has your improved relationship and showing with the third-party evaluators, has that been a real needle mover for pipeline expansion and also retention? It certainly has. I'd start with retention- Okay ... for sure. I mean, I think when you need to reset the narrative for the company, it has to start with... I mean, the third-party evaluators, three of whom were on stage with us- Right ... at Investor Day, there was a re-engagement that happened when Dave came in, given his relationships in the space. They sit across probably 75% of the revenue on our large enterprise clients. There's, you know, the, Success happens when they're with us, where they understand who we are, where we're going as a company, where we're focused. I was on a call with one of the three, on Thursday last week, talking through the elements of our business and what we were doing. Gave me a great opportunity to ask them how we're doing, right? And hear the positive feedback from them, and how we're showing up, and what we're doing for clients today, and where we're at in the market. So it's very positive from them. Again, it's a longer sales cycle, so this takes a little bit of time of that re-engagement, that showing the proof points of what we can do, and how we're showing up for either new deals, as well as how we're delivering for current clients, and our client reference points. Mm. And the beginnings of those proactive discussions on large enterprise clients who are either coming to market now or probably coming to market in the next 12 months. And so that's a big deal, I'd say, right now in retention, and it's a bigger deal in the go forward in terms of deals that come to market... Right ... just given the sales cycle. Sure. So, so going well. And that... Listen, we still have to, you know, again, from the AI transformation, what we can do on the product and technology side, delivering for clients, the integrated nature of delivery and everything that we're doing around the COEs, makes that a more seamless feel for clients, and the TPEs see that as well. And so those are, those are the big elements. That's... They still wanna see us continue to execute and evolve on that side. What are some of the areas the TPEs are kind of, like, focused? I would think that you're really best in class, at least on the tech side. I don't think we have to worry about product parity as much. It's... and then you mentioned execution a lot. What are you talking about in terms of execution? You know, it can- Is it NPS scores? Is it customer sat? Is it, It can be customer sat. It can be... So think about us. There's no one clear comp for us in the market competitively on the integrated nature of what we do. So if somebody's looking for integrated solutions around health and wealth and all the products and solutions, we start in a... We have a big headstart in that sales cycle. I think where their feedback is, and where we're focused on execution, is on a best of breed. Got it. So if you're with a current client, but they're looking at navigation, or they're looking at leave administration, the competitive set in that space only do that work, right? So the competitors in navigation- Enterprise is known for just generally going best of breed versus bundled solution. Correct. And so we need to also, as an enterprise company that has all the solutions, when we're going head-to-head on a best of breed, we need to be able to compete with that same level of domain expertise, understanding of that product set, the environment that they're in, and what sells in that space. And so those are the... Selling execution is the domain expertise to show up with the same level of expertise and history within that business, how it connects with what we do, and sells the value of what we can do, head-to-head against the best of breed in that space. And so- That or sell the connected, the value proposition to having connected data altogether. For sure. And again, that is where we, I think, in the existing relationships, where we build upon, we've got a huge advantage already there. But we need to be able to do both. Mm. We've seen that we need to be able to do both, and that's driving some of the changes that Dave is looking at, again, on the edges of the... You know, not a revamp of the go-to-market, as I said, but just, you know, how can you, you know, bring in a couple more specialty sellers in that best of breed space that grew up in that product and solution, that have the product expertise, that have the domain expertise in that area? That's, you know, so that's what I mean. The execution around it is just, again, showing up and... Yeah ... getting that deal to close. Fine-tuning. Correct. I think- That's right ... we're in a That's right. I mean, we've gone through the major capital restructuring, and the spin-off of the payroll business. We've had major changes in the go-to-market. The personality of the management team is drastically changed, and strategically, how you think about this, how the company is run is certainly changed quite a bit. Now we're kind of in that phase of, "All right, we've done the heavy lifting. Let's fine-tune a couple of these elements so we can be more competitive in the marketplace, have a higher value proposition for our clients, improve retention," like you've talked about. It seems like you're executing on all those things. It's been a bit of a cadence- That's right ... but coming together. That's right. And again, it's there is a cycle here. It's, you know, hard to believe it's been a year already for Dave and the seed- Right ... and what we've been doing, but there has... We feel really good in terms of the foundation of the business, the strength of the company, and the opportunity ahead. Fantastic. Well, I think we're gonna end it there. Jeremy, always great to chat with you, and thrilling to go back and forth with you on this topic. Great to be here. Thanks for having me. Thank you very much. Thank you. Thank you. That's all-