Earnings release
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ALIGHT REPORTS SECOND QUARTER 2025 RESULTS August 5, 2025 – Revenue of $528 million –– 95% of projected 2025 revenue under contract –– Key wins with Thermo Fisher Scientific, Highmark Health, Reinsurance Group of America, Incorporated (RGA) and Trinity Industries –– Announces new Wealth Solutions relationship with Goldman Sachs Asset Management –CHICAGO--(BUSINESS WIRE)-- Alight, Inc. (NYSE: ALIT), a leading cloud-based human capital and technology-enabled services provider, todayreported results for the second quarter ended June 30, 2025.“Our underlying business operations continued to strengthen during the second quarter,” said CEO Dave Guilmette. “We are making importantstrategic progress to accelerate our client management and delivery capabilities through automation, artificial intelligence, innovation andpartnerships. These initiatives are helping our clients realize improved return on investment from their benefits solutions and driving continuedstrength in client retention.”Presentation of ResultsSecond Quarter 2025 Highlights (all comparisons are relative to second quarter 2024) Revenue decreased 1.9% to $528 millionGross profit of $176 million and gross profit margin of 33.3%, compared to $167 million and 31.0%, respectively, and adjusted gross profit of $205million and adjusted gross profit margin of 38.8%, compared to $196 million and 36.4%, respectivelyNet loss of $1,073 million compared to net loss of $4 million, primarily driven by the $983 million non-cash goodwill impairment charge related toour Health Solutions reporting unitAdjusted EBITDA improved to $127 million from $105 millionDiluted loss per share of $2.03 compared to diluted loss per share of $0.01, and adjusted diluted earnings per share of $0.10 compared to $0.05per shareNew wins or expanded relationships with companies including Thermo Fisher Scientific, Highmark Health, Reinsurance Group of America,Incorporated (RGA) and Trinity IndustriesRepurchased $20 million of common stock under existing share repurchase programDeclared and paid a $0.04 per share dividend Second Quarter 2025 ResultsRevenue decreased 1.9% to $528 million, as compared to $538 million in the prior year period. The change was primarily due to lower projectrevenue and net commercial activity. Recurring revenues were 93.2% of total revenue.Gross profit was $176 million, or 33.3% of revenue, compared to $167 million, or 31.0% of revenue in the prior year period. The change in gross profitwas primarily due to productivity savings.Selling, general and administrative expenses improved $16 million when compared to the prior year period. This was due to lower professional feesincurred related to the sale and separation of the Payroll & Professional Services business and a reduction in compensation expenses primarilyrelated to non-cash share-based awards.During the quarter, the Company recognized a non-cash goodwill impairment of $983 million relating to the Health Solutions reporting unit afterevaluating macroeconomic and industry conditions, and the market valuation of the Company. This non-cash charge does not impact futureoperations.Interest expense of $22 million improved $11 million from the prior year period. Interest expense benefited from the repricing of the 2028 term loanand the $740 million debt pay down in the third quarter of 2024.The Company’s loss from continuing operations before income tax was $1,076 million compared to a loss from continuing operations before incometax of $2 million in the prior year period. This was primarily attributable to the non-cash goodwill impairment charge related to our Health Solutionsreporting unit, non-operating fair value remeasurements of financial instruments and the tax receivable agreement, partially offset by lower selling,general and administrative expenses, lower interest expense as a result of the debt pay down and other income recorded in conjunction with thetransition services agreement entered into with the purchaser of the divested Payroll & Professional Services business.Balance Sheet HighlightsAs of June 30, 2025, the Company’s cash and cash equivalents balance was $227 million, total debt was $2,015 million and total debt net of cash andcash equivalents was $1,788 million.Partnering with Goldman Sachs Asset ManagementToday, the Company announced it is partnering with Goldman Sachs Asset Management to advance Alight's wealth solutions offerings. Leveragingthe Alight Worklife platform, Goldman Sachs Asset Management will serve as a sub-advisor for the Alight Financial Advisors Defined Contributionsolution and the recently introduced Alight IRA solution. With Goldman Sachs Asset Management’s broad experience in the retirement space andscalable technology, Alight is able to bring additional value to clients while expanding the options of its benefits portfolio, enabling growth in a newcategory.Business Outlook“The positive impact of our transformational initiatives should enable us to deliver strong profitability and cash flow aligned to our outlook. We feelgood about the operational levers within our control and are tracking to another strong year of client retention rates, though we refined our top-lineforecast due to deals taking longer to close in the current environment which is temporarily delaying planned growth. Our pipeline remains strong,particularly for deals in the later stages, and we continue to see good progress with prospective clients,” said Guilmette.The Company's 2025 outlook includes: Revenue of $2,282 million to $2,329 million.Adjusted EBITDA of $620 million to $645 million.Adjusted diluted EPS of $0.58 to $0.64.Free cash flow of $250 million to $285 million. Reconciliations of the historical financial measures used in this press release that are not recognized under U.S. generally accepted accountingprinciples ("GAAP") are included below. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling informationis not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, weare unable to address the probable significance of the unavailable information, which could be material to future results.Earnings Conference Call and Webcast InformationA conference call to discuss the Company’s second quarter 2025 financial results is scheduled for today, August 5, 2025 at 7:30 a.m. Central Time(8:30 a.m. Eastern Time). Interested parties can access the live webcast and accompanying presentation materials by logging on to the InvestorRelations section on the Company’s website at http://investor.alight.com. A replay of the conference call and the accompanying presentation materialswill be available on the investor relations website for approximately 90 days.About Alight SolutionsAlight is a leading cloud-based human capital technology and services provider for many of the world’s largest organizations and 35 million peopleand dependents. Through the administration of employee benefits, Alight helps clients gain a benefits advantage while building a healthy andfinancially secure workforce by unifying the benefits ecosystem across health, wealth, wellbeing, absence management and navigation. Our AlightWorklife platform empowers employers to gain a deeper understanding of their workforce and engage them throughout life’s most important ® ® 2025-08-05 13:31 Alight, Inc. - Alight Reports Second Quarter 2025 Results https://investor.alight.com/news/news-details/2025/Alight-Reports-Second-Quarter-2025-Results/default.aspx 1/5
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moments with personalized benefits management and data-driven insights, leading to increased employee wellbeing, engagement and productivity.Learn more about the Alight Benefits Advantage™ at alight.com.Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectedrevenue under contract, statements related to our strategic progress, statements related to our ability to retain clients, statements regarding ourpartnering with Goldman Sachs Asset Management, statements regarding our ability to deliver strong profitability and cash flow, statements regardingour pipeline and prospective clients, and statements related to the expectations regarding the performance and outlook for Alight’s business, financialresults, liquidity and capital resources, including statements in the "Business Outlook" section of this press release. In some cases, these forward-looking statements can be identified by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “would,”“should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or othercomparable words. Such forward-looking statements are subject to various risks and uncertainties including, among others, risks related to our abilityto successfully execute the next phase of our strategic transformation, including our ability to effectively and appropriately separate the Payroll andProfessional Services business, risks related to declines in economic activity in the industries, markets, and regions our clients serve, including as aresult of macroeconomic factors beyond our control, heightened interest rates or changes in monetary, trade and fiscal policies, competition in ourindustry, risks related to cyber-attacks and security vulnerabilities and other significant disruptions in our information technology systems andnetworks, risks related to our ability to maintain the security and privacy of confidential, personal or proprietary data, risks related to actions orproposals from activist stockholders, and risks related to our compliance with applicable laws and regulations, including changes thereto. Additionalfactors that could cause Alight’s results to differ materially from those described in the forward-looking statements can be found under the sectionentitled “Risk Factors” of Alight’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on February 27, 2025,as such factors may be updated from time to time in Alight's filings with the SEC, which are, or will be, accessible on the SEC's websiteat www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicatedin these statements. These factors should not be construed as exhaustive and should be considered along with other factors noted in thispresentation and in Alight’s filings with the SEC. Alight undertakes no obligation to publicly update or review any forward-looking statement, whetheras a result of new information, future developments or otherwise, except as required by law.Non-GAAP Financial Measures and Other InformationThe Company refers to certain non-GAAP financial measures in this press release, including: Adjusted EBITDA From Continuing Operations, AdjustedEBITDA Margin From Continuing Operations, Adjusted Net Income From Continuing Operations, Adjusted Diluted Earnings Per Share FromContinuing Operations, Free Cash Flow, Adjusted Gross Profit and Adjusted Gross Profit Margin. Please see below for additional information and forreconciliations of such non-GAAP financial measures. The presentation of non-GAAP financial measures is used to enhance our investors’ andlenders’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as asubstitute for the directly comparable financial measures prepared in accordance with GAAP.Adjusted EBITDA From Continuing Operations, which is defined as earnings from continuing operations before interest, taxes, depreciation andintangible amortization adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operationalperformance. Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA From Continuing Operations divided by revenue.Both Adjusted EBITDA From Continuing Operations and Adjusted EBITDA Margin From Continuing Operations are non-GAAP financial measuresused by management and our stakeholders to provide useful supplemental information that enables a better comparison of our performance acrossperiods as well as to evaluate our core operating performance.Adjusted Net Income From Continuing Operations, which is defined as net income (loss) from continuing operations adjusted for intangibleamortization and the impact of certain non-cash items that we do not consider in the evaluation of ongoing operational performance, is a non-GAAPfinancial measure used solely for the purpose of calculating Adjusted Diluted Earnings Per Share From Continuing Operations.Adjusted Diluted Earnings Per Share From Continuing Operations is defined as Adjusted Net Income From Continuing Operations divided by theadjusted weighted-average number of shares of Alight Inc. common stock, diluted. Adjusted Diluted Earnings Per Share From Continuing Operationsis used by us and our investors to evaluate our core operating performance and to benchmark our operating performance against our competitors.Free Cash Flow is defined as cash provided by operating activities net of capital expenditures. Management believes that free cash flow is animportant liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, makestrategic acquisitions and investments and for certain other activities such as dividends and stock repurchases.Adjusted Gross Profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation, and AdjustedGross Profit Margin is defined as Adjusted Gross Profit divided by revenue. Management uses Adjusted Gross Profit and Adjusted Gross Profit Marginas key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting Adjusted GrossProfit and Adjusted Gross Profit Margin is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparisonbetween periods.Revenue Under Contract is an operational metric that represents management’s estimate of anticipated revenue expected to be recognized in theperiod referenced based on available information that includes historical client contracting practices. The metric does not reflect potential future eventssuch as unexpected client volume fluctuations, early contract terminations or early contract renewals. Our metric may differ from similar terms used byother companies and therefore comparability may be limited.Condensed Consolidated Statements of Income (Loss)(Unaudited)Three Months Ended June 30,Six Months Ended J(in millions, except per share amounts) 2025 2024 2025Revenue $ 528 $ 538 $ 1,076 $Cost of services, exclusive of depreciation and amortization325 345 676Depreciation and amortization 27 26 53Gross Profit 176 167 347Operating ExpensesSelling, general and administrative 130 146 234Depreciation and intangible amortization 73 73 148Goodwill impairment 983 — 983Total Operating expenses 1,186 219 1,365Operating Income (Loss) From Continuing Operations(1,010) (52) (1,018)Other (Income) Expense(Gain) Loss from change in fair value of financial instruments28 (52) 20(Gain) Loss from change in fair value of tax receivable agreement23 (31) 32Interest expense 22 33 44Other (income) expense, net (7) — (18)Total Other (income) expense, net 66 (50) 78Income (Loss) From Continuing Operations Before Taxes (1,076) (2) (1,096)Income tax expense (benefit) (3) 2 (6)Net Income (Loss) From Continuing Operations(1,073) (4) (1,090)Net Income (Loss) From Discontinued Operations, Net of Tax (1) 27 (9)Net Income (Loss) (1,074) 23 (1,099)Net income (loss) attributable to noncontrolling interests(1) — (1)Net Income (Loss) Attributable to Alight, Inc. $ (1,073) $ 23 $ (1,098) $ 2025-08-05 13:31 Alight, Inc. - Alight Reports Second Quarter 2025 Results https://investor.alight.com/news/news-details/2025/Alight-Reports-Second-Quarter-2025-Results/default.aspx 2/5
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Earnings (Loss) Per ShareBasic and DilutedContinuing operations $ (2.03) $ (0.01) $ (2.05) $Discontinued operations $ 0.00 $ 0.05 $ (0.02) $Net Income (Loss) $ (2.03) $ 0.04 $ (2.07) $ Condensed Consolidated Balance Sheets(Unaudited) June 30,2025 D (in millions, except par values)AssetsCurrent AssetsCash and cash equivalents $ 227 $Receivables, net 411Other current assets 160Fiduciary assets 215Total Current Assets 1,013Goodwill 2,229Intangible assets, net 2,714Fixed assets, net 389Deferred tax assets, net 53Other assets 379Total Assets $ 6,777 $ Liabilities and Stockholders' EquityLiabilitiesCurrent LiabilitiesAccounts payable and accrued liabilities $ 280 $Current portion of long-term debt, net 20Other current liabilities 355Fiduciary liabilities 215Total Current Liabilities 870Deferred tax liabilities 22Long-term debt, net 1,995Long-term tax receivable agreement 600Financial instruments 21Other liabilities 148Total Liabilities $ 3,656 $Commitments and ContingenciesStockholders' EquityPreferred stock at $0.0001 par value: 1.0 shares authorized, none issued and outstanding$ — $Class A Common Stock: $0.0001 par value, 1,000.0 shares authorized; 564.8 and 560.5 shares issued, and 528.8 and531.7 shares outstanding as of June 30, 2025 and December 31, 2024, respectively—Class B Common Stock: $0.0001 par value, 20.0 shares authorized; 9.9 and 10.0 issued and outstanding as of June 30,2025 and December 31, 2024, respectively —Class V Common Stock: $0.0001 par value, 175.0 shares authorized; 0.5 and 0.5 issued and outstanding as of June 30,2025 and December 31, 2024, respectively —Class Z Common Stock: $0.0001 par value, 12.9 shares authorized; 0.0 and 0.0 issued and outstanding as of June 30,2025 and December 31, 2024, respectively —Treasury stock, at cost (36.0 and 28.8 shares at June 30, 2025 and December 31, 2024, respectively)(259)Additional paid-in-capital 5,101Accumulated deficit (1,758)Accumulated other comprehensive income 34Total Alight, Inc. Stockholders' Equity $ 3,118 $Noncontrolling interest 3Total Stockholders' Equity $ 3,121 $Total Liabilities and Stockholders' Equity $ 6,777 $ Condensed Consolidated Statements of Cash Flows(Unaudited) Six Months Ended (in millions) 2025Operating activities:Net Income (Loss) From Continuing Operations $ (1,090) $Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation 60Intangible asset amortization 141Noncash lease expense 5Financing fee and premium amortization 1Share-based compensation expense 11(Gain) loss from change in fair value of financial instruments 20(Gain) loss from change in fair value of tax receivable agreement 32Release of unrecognized tax provision —Deferred tax expense (benefit) (8)Goodwill impairment 983Other 11Changes in operating assets and liabilities:Accounts receivable 60Accounts payable and accrued liabilities (76)Other assets and liabilities 9Cash provided by operating activities - continuing operations 159Cash provided by operating activities - discontinued operations —Net cash provided by operating activities $ 159 $ 2025-08-05 13:31 Alight, Inc. - Alight Reports Second Quarter 2025 Results https://investor.alight.com/news/news-details/2025/Alight-Reports-Second-Quarter-2025-Results/default.aspx 3/5
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Investing activities:Capital expenditures (57)Cash provided by (used in) investing activities - continuing operations(57)Cash used in investing activities - discontinued operations —Net cash provided by (used in) investing activities $ (57) $Financing activities:Dividend payments (43)Net increase (decrease) in fiduciary liabilities (24)Repayments to banks (10)Principal payments on finance lease obligations (12)Payments on tax receivable agreements (100)Tax payment for shares/units withheld in lieu of taxes (11)Repurchase of shares (40)Other financing activities (2)Cash used for financing activities - continuing operations (242)Cash provided by (used in) financing activities - discontinued operations—Net Cash provided by (used in) financing activities $ (242) $Effect of exchange rate changes on cash, cash equivalents and restricted cash - discontinued operations—Net increase (decrease) in cash, cash equivalents and restricted cash(140)Cash, cash equivalents and restricted cash balances from:Continuing operations - beginning of year $ 582 $Discontinued operations - beginning of year —Less discontinued operations - end of period — Continuing operations - end of period $ 442 $ Reconciliation of Net Income (Loss) From Continuing Operations to Adjusted EBITDA from Continuing Operations (Unaudited)Three Months Ended June 30,Six Months Ended J(in millions) 2025 2024 2025Net Income (Loss) From Continuing Operations$ (1,073) $ (4) $ (1,090) $Interest expense 22 33 44Income tax expense (benefit) (3) 2 (6)Depreciation 30 30 60Intangible amortization 70 69 141EBITDA From Continuing Operations (954) 130 (851)Share-based compensation 5 20 11Transaction and integration expenses 5 19 8Restructuring 36 18 40(Gain) Loss from change in fair value of financial instruments28 (52) 20(Gain) Loss from change in fair value of tax receivable agreement23 (31) 32Goodwill impairment and other 984 1 985 Adjusted EBITDA From Continuing Operations$ 127 $ 105 $ 245 $ Revenue $ 528 $ 538 $ 1,076 $Adjusted EBITDA Margin From Continuing Operations24.1% 19.5% 22.8% (1)Adjusted EBITDA excludes the impact of discontinued operations.(2)Transaction and integration expenses primarily relate to acquisition and divestiture activities.(3)Other primarily includes a $983 million non-cash goodwill impairment charge for the three and six months ended June 30, 2025 related to theCompany's Health Solutions reporting unit.(4)Adjusted EBITDA Margin From Continuing Operations is defined as Adjusted EBITDA from Continuing Operations as a percentage of revenue. Reconciliation of Net Income (Loss) From Continuing Operations to Adjusted Net Income andAdjusted Diluted Earnings per Share From Continuing Operations (Unaudited)Three Months Ended June 30,Six Months Ended J2025 2024 2025(in millions, except share and per share amounts)Numerator:Net Income (Loss) From Continuing Operations Attributable to Alight, Inc.$ (1,072) $ (4) $ (1,089) $Conversion of noncontrolling interest (1) — (1)Intangible amortization 70 69 141Share-based compensation 5 20 11Transaction and integration expenses 5 19 8Restructuring 36 18 40(Gain) Loss from change in fair value of financial instruments28 (52) 20(Gain) Loss from change in fair value of tax receivable agreement23 (31) 32Goodwill impairment and other 984 2 985Tax effect of adjustments (22) (12) (39) Adjusted Net Income From Continuing Operations$ 56 $ 29 $ 108 $ Denominator:Weighted average shares outstanding - basic528,469,912546,174,400530,378,7985Dilutive effect of the exchange of noncontrolling interest units— 554,568 —Dilutive effect of RSUs — 374,688 —Weighted average shares outstanding - diluted528,469,912547,103,656530,378,7985Exchange of noncontrolling interest units 510,115 107,673 510,115Impact of unvested RSUs 7,405,171 9,222,832 7,405,171 Adjusted shares of Class A Common Stock outstanding - diluted536,385,198556,434,161538,294,0845 Basic (Net Loss) Earnings Per Share From Continuing Operations$ (2.03) $ (0.01) $ (2.05) $Diluted (Net Loss) Earnings Per Share From Continuing Operations$ (2.03) $ (0.01) $ (2.05) $Adjusted Diluted Earnings Per Share From Continuing Operations$ 0.10 $ 0.05 $ 0.20 $ (1)Excludes the impact of discontinued operations.(2)Transaction and integration expenses primarily relate to acquisition and divestiture activities.(3)Other primarily includes a $983 million non-cash goodwill impairment charge for the three and six months ended June 30, 2025 related to theCompany's Health Solutions reporting unit. (1) (2) (3) (4) (1) (2) (3) (4) (5) (6) (7)(8) 2025-08-05 13:31 Alight, Inc. - Alight Reports Second Quarter 2025 Results https://investor.alight.com/news/news-details/2025/Alight-Reports-Second-Quarter-2025-Results/default.aspx 4/5
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(4)Income tax effects have been calculated based on the statutory tax rates for both U.S. and foreign jurisdictions based on the Company's mix ofincome and adjusted for significant changes in fair value measurement.(5)Assumes the full exchange of the units held by noncontrolling interests for shares of Class A Common Stock of Alight, Inc. pursuant to theexchange agreement.(6)Includes non-vested time-based restricted stock units that were determined to be antidilutive for U.S. GAAP diluted earnings per share purposes.(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'svolume-weighted average price ("VWAP") is >$12.50 for any 20 trading days within a consecutive period of 30 trading days; (ii) 7.5 million shareswill be issued if the Company's Class A Common Stock VWAP is >$15.00 for any 20 trading days within a consecutive period of 30 trading days.Both tranches have a seven-year duration.(8)Excludes approximately 5.9 million and 14.1 million performance-based units, which represents the gross number of shares expected to vest basedon achievement of performance conditions as of June 30, 2025 and 2024, respectively. Gross Profit to Adjusted Gross Profit Reconciliation(Unaudited) Three Months Ended June 30,Six Months Ended J($ in millions) 2025 2024 2025Gross Profit $ 176 $ 167 $ 347 $Add: stock-based compensation 2 3 5Add: depreciation and amortization 27 26 53Adjusted Gross Profit $ 205 $ 196 $ 405 $Gross Profit Margin 33.3% 31.0% 32.2%Adjusted Gross Profit Margin 38.8% 36.4% 37.6% Free Cash Flow Reconciliation(Unaudited) Six Months Ended J($ in millions) 2025Non-GAAP free cash flow reconciliation:Cash provided by operating activities - continuing operations $ 159 $Capital expenditures (57) Non-GAAP free cash flow $ 102 $ Other Select Financial Data(Unaudited) Three Months Ended June 30,Six Months Ended J($ in millions) 2025 2024 2025Revenue DisaggregationRecurring $ 492 $ 493 $ 1,012 $Project 36 45 64 Total revenue $ 528 $ 538 $ 1,076 $ BPaaS revenue $ 124 $ 115 $ 250 $Gross ProfitTotal gross profit $ 176 $ 167 $ 347 $Total gross margin 33.3% 31.0% 32.2%Adjusted Gross ProfitTotal adjusted gross profit $ 205 $ 196 $ 405 $Total adjusted gross margin percent 38.8% 36.4% 37.6%Adjusted EBITDA From Continuing OperationsAdjusted EBITDA From Continuing Operations $ 127 $ 105 $ 245 $Adjusted EBITDA Margin From Continuing Operations24.1% 19.5% 22.8%Free Cash FlowFree Cash Flow From Continuing Operations $ 102 $ Investors:Jeremy Coheninvestor.relations@alight.com Media:Mariana Fischbachmariana.fischbach@alight.comSource: Alight, Inc. 2025-08-05 13:31 Alight, Inc. - Alight Reports Second Quarter 2025 Results https://investor.alight.com/news/news-details/2025/Alight-Reports-Second-Quarter-2025-Results/default.aspx 5/5