Alight, Inc.

Second-quarter revenue was $511 million, down approximately 3% year over year. Recurring revenue was $471 million, down 4.3% from the prior year period, and project revenue was $40 million, up 11% year over year. Adjusted gross profit was $176 million, down $29 million year over year, and adjusted gross margin declined 440 basis points. Adjusted EBITDA was $92 million with an 18% margin, versus $127 million and 24% in the prior-year period. Adjusted net income was $26 million and adjusted EPS was $0.91, versus $56 million and $2.09 last year. The company ended the quarter with $545 million of total liquidity, including $215 million of cash and a $330 million undrawn revolver, and year-to-date free cash flow was $101 million. For 2026, management guided to revenue of $2,078,000,000 to $2,098,000,000 and adjusted EBITDA of $400 million to $415 million. Third-quarter 2026 guidance is revenue of $469 million to $479 million and adjusted EBITDA of $55 million to $61 million.

Rohit Verma framed the quarter as solid and said the company exceeded expectations mainly because of stronger project revenue and higher volumes. He emphasized that transformation initiatives are still on track, with a focus on service quality, operational execution, client relationships, and commercial capability. His tone was constructive and confident, particularly around the impact of insourcing, expanded account coverage, and AI-enabled product and service improvements.

Stephen Lasher said Q2 results beat expectations for revenue, adjusted EBITDA, and free cash flow. He highlighted the seasonality in Q3, where annual enrollment expense will pressure profitability and cash flow, but said the business should rebound in Q4; he also said full-year free cash flow conversion should be around 40% to 43% of EBITDA. He noted strong liquidity of $545 million, year-to-date free cash flow of $101 million, and reiterated that the company is prioritizing disciplined cost management, operational streamlining, and reinvestment.

Analysts focused on the apparent disconnect between better retention commentary and the expected back-half decline in recurring revenue. Management said the decline largely reflects a 12- to 18-month lag from commercial activity in 2024 and 2025, with most of the Q3 impact tied to prior renewal activity and only a minority coming from point solutions. Questions also centered on Q4 EBITDA stepping up sharply and cash deployment; management said the seasonal Q3 expense burden from annual enrollment is the main driver, Q4 is historically stronger, and capital allocation options including buybacks and leverage remain open as they evaluate the best use of cash.