Alight (ALIT) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $511 million, down 3.2% year-over-year, driven by lower recurring revenue but offset by strong project revenue and higher volumes.

• Adjusted EBITDA was $92 million (18% margin), down from $127 million (24.1% margin) in Q2 2025, but exceeded expectations.

• Net loss from continuing operations improved to $10 million from a $1,073 million loss in the prior year, mainly due to the absence of goodwill impairment.

• Leadership team strengthened with key hires, including a new CFO, President of Employer Solutions, and CTO, and continued investments in technology and service excellence.

• Transformation initiatives and investments in AI and client experience are modernizing offerings and improving service quality.

Financial highlights

• Q2 2026 revenue: $511 million (down 3.2% year-over-year); recurring revenue $471 million (down 4.3%), project revenue $40 million (up 11.1%).

• Adjusted gross profit was $176 million (34.4% margin), down from $205 million (38.8%) in Q2 2025.

• Adjusted net income was $26 million, with adjusted EPS of $0.91, compared to $56 million and $2.09 in Q2 2025.

• Free cash flow for the first half of 2026 was $101 million, with $48 million generated in Q2.

• Total liquidity at quarter-end was over $545 million ($215 million cash, $330 million undrawn revolver); net debt was $1,781 million.

Outlook and guidance

• Full-year 2026 revenue guidance: $2.078–$2.098 billion; adjusted EBITDA: $400–$415 million.

• Q3 2026 revenue guidance: $469–$479 million; adjusted EBITDA: $55–$61 million, reflecting seasonal expense uptick.

• Free cash flow conversion for the full year projected at 40–43% of EBITDA.

• Significant rebound in EBITDA and cash expected in Q4 2026.

• Annual savings of up to $90 million expected after completion of the Post-Separation Plan by year-end 2026.